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Tesla gets about $1.25 billion in tax abatement from Nevada

In exchange for its $5 billion investment toward the construction of a giant battery factory in Northern Nevada, Tesla will receive $1.25 billion in tax abatement from the state after the Nevada Legislature approved the deal last week.

According to Senate Bill 1, Tesla made a commitment to invest $3.5 billion in the state within the first 10 years of the agreement. It passed the Senate with a 21-0 vote.

Three other deals were approved in the same process including:
  1. Assembly Bill 1: Provides Tesla with eight years of discounted electricity from NV Energy. The law expands the existing discount period to eight years from four years and requires the company to sign a 10-year contract to purchase grid power from the utility. The value of the discount is estimated to be about $8 million over the eight years. Northern Nevada power customers will see their bill go up about $1.52 a year to pay for Tesla's discount.
  2. Assembly Bill 2: Allows electric car manufacturers to sell directly to consumers, bypassing the need for a dealership. This has been a contested issue in Texas and Arizona, where auto dealers and their lobbying arms worked to prevent Tesla and other manufacturers from selling directly to customers.
  3. Assembly Bill 3: Eliminates a tax break for insurance companies that locate their home offices in Nevada. The tax break is worth about $25 million a year. That money will be shifted to pay for Tesla's tax incentive package. Insurance companies will keep their tax break until Jan. 1, 2016, when the program will shrink to $5 million a year. It will be completely eliminated in 2021.
Source : rgj.com