Travis County in Texas Approves Tax Breaks for Tesla Under Certain Conditions JD Lasica from Pleasanton, CA, US / CC BY (https://creativecommons.org/licenses/by/2.0)

Tesla has been granted tax breaks worth a minimum of $14.7 million over ten years by the Travis County in Texas. That is if Elon Musk's electric vehicle manufacturing company pushes through with building their Cybertruck Gigafactory near Austin.

Tesla's proposed development to be called "Austin Green development" moves a step closer with the approval of the tax break under certain conditions, including the investment of at least $1.1 billion in the manufacturing plant within the first five years.

Travis County, in return, will rebate 70 percent of Tesla's property taxes. If Tesla exceeds the $1.1 billion, the tax relief will increase to 75 percent to be applied to taxes for investment between $1.1 billion and $2 billion, and 80 percent for the investment above $2 billion.

Also, Tesla must have at least 50 percent of its workforce to be residents of Travis County. Apart from investing in the factory within the first five years, Tesla must also not fall 75 percent short of the required amount and jobs created in any year. Any breach of the agreement by Tesla will cause a clawback of the tax rebates' previous two years.

Travis County's decision to grant the incentive comes after Del Valle ISD approved Tesla's proposed plan, Colorado River Project LLC, and grant the company $46.4 million property tax breaks spread over ten years.

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The proposal was discussed in a closed session last July 7, 2020, before a public hearing was held and streamed lived on YouTube.

Four out of the five commissioners voted to have the agreement approved; Commissioner Margaret Gómez abstained. It was reported that before the virtual meeting, Gómez was pushing to have the voting delayed for one more week, so a more thorough review can be done.

The other commissioners opted otherwise as they are concerned that it might prompt Tesla to consider other locations instead.

Tesla was also considering Tulsa, Oklahoma, as a possible location for the factory. The proposed Austin site is a 2,100-acre land at the intersection of Texas and Harold Green Road.

Tesla said the project would potentially bring in 5,000 jobs with many of the positions requiring no more than high school education. The unemployment rate in Travis County in May rose 11.6 percent to 81,466 from 2.6 percent in February, according to the U.S. Bureau of Labor Statistics

Tesla proposes career-building programs, including internships, apprenticeships, and mentoring. The company's offer to foodservice and custodial workers is a minimum wage of $15 per hour.

Those opposing the proposal argue that Tesla's offer to the low-skilled workers would not be enough considering the high cost of rent, high home prices, and the tight inventory of homes in the area. Other concerns raised include workplace safety and labor relations.

It is estimated that even with the tax rebates, Tesla's $1.1 billion investment will generate $8.8 million in tax revenue over the first ten years.

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