Tesla Motors Inc (NASDAQ:TSLA) finally got the official approval for $1.3 billion in tax incentives from the Nevada Assembly. Brian Sandoval, governor of Nevada, floated the tax break and approved the company’s direct selling model.

Tesla Motors Inc Direct Sales, Tax Breaks Approved By Nevada

Direct selling model also approved

The bill was approved by the 42-member assembly and 21 members of the Senate, after which Sandoval signed it. The voting was done to pass the largest tax rebate bill ever, and the Senate voted unanimously to approve it.

“This is some of the most important legislation that’s hit this state in perhaps our history,” the Republican governor said. “We have changed the trajectory of this state, perhaps forever.”

Authorities have agreed upon exempting Tesla from paying sales taxes for 20 years and property and business taxes for 10 years. Both the governor and CEO Elon Musk wanted to get this bill through the house to set up the gigafactory to build 500,000 cars.

Also Tesla got a free hand in selling the cars directly to customers rather than channeling it through auto dealers, and authorities reduced tax breaks for filmmakers and insurance companies.

What if Tesla fails to meet the requirements?

The gigafactory has been in the news for all these months, and states have tussled hard for getting the factory, which is expected to bring more than 20,000 jobs and $100 billion over the next 20 years. It will be the biggest lithium battery factory in the world.

“We have a lot more to do but this is a great way to start,” said Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas.

If the Palo Alto-based electric car manufacturer fails to abide by the conditions mentioned in the bill, such as investing up to $3.5 billion in 10 years or hiring the adequate number of workers, then it will have to pay back the exemptions with interest. Also the company must operate in the state for a time period decided upon by the economic development director, or it must pay back its abatements.

Tesla Motors shares fell .28% to $280.31 on Thursday, while after hours, shares were down .05%.