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.
Source: Steve Hill, executive director of the Governor's Office of Economic Development