Tesla Motors Inc (NASDAQ:TSLA) inked a deal with the state of Nevada to construct its gigafactory near Reno. At that time, it was reported widely that the electric car maker received $1.3 billion in tax incentives. It is not certain how much the EV firm is exactly getting from the state currently because it was awarded as transferable tax credits (TTC), property and sales tax abatements, and discounted electricity rates. Now it appears the EV firm has started to make a profit from it.
Tesla earned about $20 million from TTC
We now know through documents that were recently released by the Nevada Governor’s Office of Economic Development (GOED) that the automaker has begun profiting from transferable tax credits by selling around $20 million worth to MGM Grand Casino, reports Electrek. The exact amount of money the automaker got from the deal is not clear since there is generally a discount on the value of tax credits, but GOED Executive Director Steve Hill said the electric car maker got “close” to $20.4 million.
“More than $9 million in TTCs earned by Tesla Motors Inc (NASDAQ:TSLA) in 2015 was reported by the Las Vegas Review-Journal in December, but only after months of attempts to get unredacted public records from GOED did the state agency disclose where the tax credits went,” ThisisReno reports about the deal.
Another $10.8 million in tax credits have been transferred by the electric car maker to MGM Grand since that time. MGM Grand used the credits for gaming license fees. The GOED promptly moved to get Tesla’s TTC documents signed in March so that MGM could use the credits to meet a gaming tax filing deadline, reports ThisisReno, citing internal emails retrieved through the public records request.
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First money earned from incentive package
The deal was closed on March 14, just in time for the end of the first quarter. In its Quarterly Activity Report for the Gigafactory, the GEOD judged the automaker’s progress to be satisfactory in the first quarter. Hill also talked of the benefits to the state through the deal. The benefit comes from what the automaker is bringing: a big boost in the economy, a lot of investment and more jobs.
In a statement to Electrek regarding the TTC sale to MGM the automaker said the approximately $20 million in tax credits that it sold to MGM is the first money it received under its incentive package from the state.
“Any fair description of this package demonstrates how small it is relative to the total cost of the Gigafactory and the economic development that Tesla is bringing to Nevada,” the statement read.
On Tuesday, Tesla Motors Inc (NASDAQ:TSLA) shares closed up 2.8% at $198.55. Year to date, the stock is down almost 17%.