Posted on 09/04/2014 11:15:35 AM PDT by jazusamo
Nevada looks to be the winner for Tesla Motors’ (TSLA) new $5 billion battery factory, but the win comes at a cost for state taxpayers.
Tesla is seeking up to $3 billion in new tax breaks to help fund about half of its cost for the new battery factory, which Tesla has already disclosed in regulatory filings would be located outside Reno, Nev., about 235 miles from its auto assembly plant in the San Francisco Bay area.
“The total capital expenditures associated with the gigafactory through 2020 are expected to be $4-5 billion (sic), of which approximately $2 billion is expected to come from Tesla,” the company said in its latest regulatory filings.
Although news reports indicate the breaks could amount to $400 million annually, it may be more like $600 million. Nevada beat out California, Texas, New Mexico, and Arizona for the new $5 billion battery plant, which is expected to create 6,500 jobs, plus generate economic growth. State legislators are likely betting this growth will offset the costs of the tax breaks.
Tesla needs that $600 million a year through 2020, when its battery factory is expected to be fully operational, because it’s experiencing significant cash burn. It has $2.6 billion in cash versus $4 billion in liabilities. Tesla has also disclosed its overhead costs are now rising 20% on a year-over-year basis, and research and development expenses are increasing 30%. Capital expenditures continue to bear down as Tesla expands the number of factories and charging stations (the count for the latter now stands at 183 globally).
(Excerpt) Read more at foxbusiness.com ...
Hand them $3 billion and they would
“pre-approved industrial and manufacturing uses”
And pre-designated as officially turtle free
Sure he will. The thing is, Uncle Sugar's pants have no pockets. So long as he can pick our pockets what does he care?
Yet you hear the producers and actors complain about how little they get from Kookifornia so they have to move production to other more socialist generous states.
That three billion dollars is enough to bring in NFL teams for Las Vegas, Reno and Carson City.
There are less than 3 million people living in NV. If I understand the article correctly and assuming it is NV who is going to write Elon a $3 billion check that is over $1,000 per man, woman and child in NV.
So, $76,700 per employee per year for the first six years... and then why not do the math for the 20 years after that?
Given Nevada’s tax system, the only place where these breaks could come is in property taxes and sales taxes:
http://taxfoundation.org/state-tax-climate/nevada
They’re not going to waive sales taxes, so probably what’s going to happen is that they’ll defer or waive property taxes on incomplete, non-operational factory buildings and property under construction until they get up and running and generating income.
So the choice for Nevada is between putting a $600 million a year set of brakes on a $5 billion decades-long project, or losing out to another state and continuing to levy a $0 a year worth of property tax on a bunch of vacant desert land.
But that's exactly NOT what's going to happen. Don't be foolish.
They're currently collecting something very close to $0 per year worth of property tax on the windswept deserted land in question, and they'll continue to collect something closer to zero than $600 million on that land while the factory is under construction, while at the same time collecting millions more in property taxes on the new housing that will be built for the construction workers and early factory employees, and the sales tax for all their purchases at Wal*Mart and AutoZone.
I’ve had to deal with them on Pipeline projects around Vegas and farther south. I didn’t know their range extend as far north and higher elevations as Reno.
If the schemes the shysters promote are as profitable as they claim, there should be private investors begging them to take their money.
Why write them a check?
3b in tax breaks means the company keeps the profits and employs a bunch of folks to spend money. Selling land in Nevada to anybody is a win for the state.
They are not “handed” $3 billion.
They may pay $3 billion less in taxes. Far different.
Well then they can go F-— themselves.
They are not writing any checks. If approved, the checks Elon writes to government would be reduced by $3 billion. That means the original tax checks for that time period would exceed $3 billion.
The turtles are a metaphor. There’s always some sage grouse or jumping mouse or owl or something that derails projects the elite don’t care about but mysteriously is not an issue for ones they like.
Money being fungible, that's a distinction without a difference
I greatly disagree.
So the flip-side is to deny them 3b in tax breaks, save 3b in the process and watch the money roll in on a piece of useless dirt?
What?
Ok, I see your point. I've actually had work impeded by those turtles so I took it quite literally.
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