Travis County is withholding millions of dollars in tax breaks after discovering that Tesla is not upholding its end of the economic development performance agreement.
Signed ahead of construction, the agreement allowed Tesla to receive massive tax breaks from the county in exchange for increased investment in the facility. Per the agreement, the county would refund up to 80% of property taxes if Tesla invested more than $2 billion in the facility.
However, part of the agreement included performance standards. Per local reporting by the Austin American-Statesman, Tesla provided County officials with incomplete documentation regarding its green building program, minimum hourly wage, and construction site safety standards.
This incomplete documentation and concerns over worker safety specifically led the County to vote 4-0 to impose a 9% clawback penalty on the automaker’s 2020, 2021, and 2022 property taxes, per a clause in the agreement.
We cannot confirm the exact dollar amount, but those familiar with the agreement have estimated that the 9% penalty over three years could amount to up to $4 million.
For the County, it is a balancing act that the Commissioner and council need to perform. On one hand, the facility has brought hundreds of high-paying jobs to local residents, but on the other hand, worker safety concerns and a lack of documentation supporting the automaker’s programs and actions have forced the decision.
Tesla has not publicly commented on the tax rebate clawback or the county’s vote.
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