Tesla Motors Inc Gigafactory: What Incentives Are Possible?

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Tesla Motors Inc NASDAQ:TSLA has been mulling over offers from five states trying to attract its massive gigafactory. The states are putting together incentive packages in an attempt to convince the automaker to build its massive $5 billion facility within their borders. So what incentives are even possible? Manufacturing.net compiled a list of the possibilities.

Nevada gigafactory site under construction

Tesla has already begun work on a possible site outside of Reno, Nev., so it seems likely that the state may be ahead of the other four. If the automaker does end up choosing Nevada as its final choice, then it could offer very few taxes. There’s apparently no personal income tax, franchise tax, gift tax, inheritance tax or estate tax.

Also corporate shares are not taxed, and neither is corporate income, at least for now. Nevada voters will be deciding in November whether they want to implement a corporate income tax to help finance the educational systems.

The state is also offering up to a 50% abatement on personal property taxes for up to ten years. In addition, there’s apparently a partial sales and use tax abatement for equipment purchases and also deferral of sales and use taxes on equipment. Nevada is also offering worker training subsidies and is already close to Tesla’s Fremont, Calif. car-making facility.

California offers tax, hiring credits

If Tesla Motors builds in California, the automaker will enjoy a 17.5% of wages tax credit for all full-time employees for 15 years. There’s also a hiring credit amounting to 35% of wages if the automaker selects a place where high unemployment and poverty and offering wages higher than some benchmarks.

Other perks in California include a sale tax exemption on the first $200 million in equipment Tesla buys for the facility and a waiver on the state’s environmental rules. And of course the automaker’s other factory is already located in California.

Texas hands out cash

If the company builds in Texas, it could receive money from the Texas Enterprise Fund or the Texas Emerging Technology Fund. Tesla CEO Elon Musk also heads up SpaceX, which enjoyed a $15.3 million incentive to open its facility there.

Other possible incentives are tax refunds and exemption from electricity and natural gas sales and use tax for manufacturing.

New Mexico and Arizona offerings

New Mexico could offer Tesla some tax breaks or tax credits and also worker training subsidies, potentially paying 75% of new worker salaries for six months. Local governments in New Mexico can also pay for improvements to infrastructure around a factory. Also the state has been touting the falling corporate income tax rate, as well as low property tax rates.

In Arizona, Tesla Motors could get as much as 75% of its employee training costs covered. The state could also offer the automaker up to $30 million in tax credits for new factories, plus a $3,000 per-employee tax credit in the first three years. Tesla could also see an additional tax credit of $5 million if it installs $300 million or more in renewable energy capacity.

In addition, Arizona offers up to 80% in property tax breaks for factories built in one of its foreign trade areas and also waives sales taxes on manufacturing equipment plus electricity and natural gas.

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