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Tesla’s private tax abatement for Giga Nevada expansion criticized by Senator

Credit: Tesla Inc.

Tesla’s tax abatement package for Giga Nevada’s expansion is under fire by Senator Dina Neal, who criticized the use of a nondisclosure agreement (NDA) to keep the specifics under wraps until just days before the Governor’s Office of Economic Development (GOED) will vote on its terms.

Neal said NDAs “shouldn’t protect large corporations and prevent the legislature and the public from understanding the full impact of taxes that would be abated to make an economic development deal.”

The GOED will vote on an abatement package for Tesla on March 2 that could be worth hundreds of millions of dollars, based on a 2014 deal that guaranteed the company (via Nevada Current):

  • a 20-year abatement on sales tax, estimated to be worth $725 million
  • a 10-year abatement on real and personal property taxes, estimated at $332 million
  • a 10-year abatement on modified business taxes, estimated to be worth $27 million
  • $195 million in transferable tax credits
  • $8 million in electricity rate discounts
  • $45 million in roadway infrastructure spending from Nevada

Earlier this month, Tesla announced would invest $3.6 billion to expand battery and Semi production at its factory near Reno, Nevada. However, the details of Tesla’s request are not going to be made public until just a few days before the vote, which Neal disagrees with.

“It is time for the legislature to re-examine the delegation of authority for tax abatements,” Neal, the Chair of the Senate Revenue and Economic Development Committee, said, according to ThisisReno. “The power of the purse is legislative. It is our job to balance the checkbook of the state’s budget, but under current law, there is an imbalance of power that prevents the Legislature from providing appropriate oversight and review of tax abatements.”

The NDA is what Neal seems to have the most issue with, especially as the abatement package is worth a substantial amount of money, and there should be more time for the public and government to understand what the impact of such a substantial tax break could imply.

Tesla Giga Nevada expansion tax breaks to remain secret for now: NV officials


Neal, along with Nevada Senator Fabian Doñate, both expressed that details regarding the tax abatement package should be voiced ahead of the vote.

“I understand the process of an NDA and some of the work you guys are doing,” Doñate said“It’s not a criticism toward your administration or to any one individual. I think it’s more so of the process.”

Neal also suggested the GOED delay the final consideration of the new abatement package for one month. Neal believes it would give the public enough time to review it after the expiration of the NDA.

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Tesla’s private tax abatement for Giga Nevada expansion criticized by Senator
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