CARSON CITY, Nev. (AP) - Nevada Gov. Brian Sandoval is asking state legislators to approve tax breaks and other incentives worth up to $1.3 billion over 20 years to bring Tesla Motors' battery factory to the state.
Tesla car/courtesy KOLO's Catherine Van
Tesla wants to build the massive, $5 billion factory at an industrial park near the Reno suburb of Sparks - as long as lawmakers agree to terms Sandoval negotiated with the electric car maker.
The ultimate cost to taxpayers depends on how much economic activity the factory generates.
Steve Hill, executive director of Sandoval's Office of Economic Development, said that at the low end, the incentives could be worth $865 million.
Hill projected the factory would generate $100 billion for Nevada's economy and create 22,000 new jobs over two decades.
Sandoval will call a special legislative session to approve the package as early as Wednesday.
CARSON CITY, Nev. (AP) - Nevada has assembled a package of tax breaks and incentives worth up to $1.3 billion over 20 years to lure Tesla Motor Inc.'s new $5 billion battery factory to an industrial park near Reno. The state Legislature will have to approve the package. Here's what the deal with the electric car maker includes:
WHAT TESLA RECEIVES:
- 100 percent abatement of sales and use taxes for 20 years, worth up to $700 million.
- 100 percent abatement of real property tax, personal property tax and payroll taxes for 10 years. Together the abatements are valued at $675 million to $1.1 billion over 20 years, depending on the size of Tesla's investment.
- Tax credits worth about $195 million over 20 years, including a jobs transferable tax credit of $12,500 per permanent employee, worth $70 million, and an investment tax credit of $125 million.
- The tax credits (about $195 million) are separate from abatements ($675 million to $1.1 billion) for a total package worth about $865 million to $1.3 billion.
- Nevada will purchase the right of way to USA Parkway to connect Interstate 80 south to U.S. Highway 50 east of Carson City and improve access to the site.
- Minor revisions in state law to ensure Tesla can sell its cars through company-owned dealerships.
WHAT NEVADA RECEIVES:
- An estimated economic impact of roughly $5 billion a year for the next 20 years for a total of $100 billion. That's equal to a bit more than 3 percent of the state's gross product.
- Some 6,500 permanent jobs averaging $25 per hour at the Tesla factory and a peak of 3,000 construction jobs leading to the plant's scheduled 2017 opening. About 22,000 projected new jobs resulting directly and indirectly from the plant over two decades.
- Tesla will make it a priority to hire Nevada residents, especially veterans.
- An estimated $1.9 billion in tax revenue for all levels of government, state, local and school districts over 20 years.
-Tesla will make a $37 million contribution to K-12 education - approximately $7.5 million a year for five years.
- Tesla will contribute $1 million to battery research at UNLV.
WHAT NEVADA CUTS:
- The state's existing film tax credit would be cut from $80 million to $10 million.
- A home office credit used by insurance companies would end Jan. 1, 2016, to save $125 million.
- The cuts totaling $195 million offset the tax credits Tesla is to receive.