New York
Tesla could get more than $60 million in tax breaks to choose site in Travis County
An Austin-area school district is considering offering more than $60 million in tax incentives to attract a proposed Tesla “gigafactory” to Central Texas, Tesla revealed Thursday.
The Del Valle Independent School District proposal was made public in a Tesla tax application filed Thursday with the Texas comptroller’s office.
The proposal would offer Tesla $68 million in property tax breaks over 10 years to put its new plant on a 2,100-acre site off Texas 130 just north of the Colorado River on the southeastern outskirts of Austin. Travis County commissioners are considering a separate tax incentive package.
The comptroller’s documents state the real value of the property would average about $600 million per year. Without the Del Valle district incentives package, Tesla TSLA, +1.22% would have to pay almost $8 million in property taxes per year.
The proposed Tesla incentives deal with the Del Valle Independent School District is a Chapter 313 agreement. That refers to Chapter 313 of the Texas Tax Code, which allows school districts to grant property tax breaks for economic development projects. The state is then required to repay the school district for the amount of property tax it gives up in the agreement.
In its application for the Del Valle incentives deal, Tesla said that it is considering both the Travis County site and a site or sites in Oklahoma as the location for the facility.
The Travis County site is roughly 2,100 acres in the Austin Green development, at Texas 130 and Harold Green Road near Austin’s airport. The property is currently a sand and gravel mining site owned and operated by Martin Marietta, according to documents filed with the comptroller’s office.
“To continue to meet increased demand and provide new products, an additional manufacturing facility is required in the United States,” Tesla said in its application. The company says eight states were identified as “viable contenders” for the facility, which the company wants to locate in the central U.S.
“The current focus is on Oklahoma and Texas as potential locations for the new facility,” Tesla said.
The estimated value of the Tesla property varies from year to year, starting at $432.1 million in 2023, the first effective year of the deal, rising to a high of $773.3 million in 2026 and then dipping to $484.5 million in the final year of the agreement in 2031, according to documents filed with the comptroller’s office.
The documents do not explain what criteria was used to create those estimated property values, or what would lead to the variation in the values.
Chapter 313 of the Texas tax code requires that a qualifying project create and maintain at least 25 qualifying jobs with a salary that is 110% of the average weekly wage for manufacturing jobs in the county where the job is located. For this project that would equate to an annual salary of $74,050, according to documents filed with the comptroller’s office.
The documents do not detail the proposed annual wage for the 5,000 additional Tesla jobs — the vast majority of the workforce for the facility — that the company would bring to Central Texas.
If approved, the Chapter 313 agreement with Tesla would not be the largest such incentive deal in the Austin area.
The Manor Independent School District has two ongoing Chapter 313 agreements with Samsung Austin Semiconductor — one created in 2005 and another in 2012 — that will give the technology company an estimated $200 million in tax breaks over a 17-year period ending in 2023.
Samsung has invested about $17 billion in its Austin campus through the years, according to the company. About 10,000 people work at the facility, about 3,000 of whom are Samsung employees, along with about 7,000 additional workers, including contractors, vendors and partners, the company has said.