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Suitors Line Up for Tesla

  • Jun 12, 2014 | Gail Cole

 Where will the electric car manufacturer park its new battery factory?

Governor Rick Perry wants Tesla to build its $5 billion battery factory in Texas. To prove his point, the Texas governor drove a shiny new Tesla electric vehicle to Sacramento, where Governor Jerry Brown (D) is putting together a package to win the factory for California. Upon arrival, Perry told reporters that the car would be “even prettier if it had a ‘Made in Texas’ bumper sticker.”

At stake here is not just bragging rights but the 6,500 jobs that will come with the new factory; and more than one state is willing to offer the electric car company enticing tax incentives in order to secure those jobs. Arizona, New Mexico and Nevada are also courting the factory, set to start production by 2017.

Curiously, Arizona and Texas don’t allow Tesla to sell its cars the way it wants, through its own dealers. Tesla can sell its cars as it chooses in California, New Mexico and Nevada.

Tesla Motors was founded by Silicon Valley engineers and is headquartered in Palo Alto, California. If it does decamp to Texas, it won’t be the first company to do so. In April of this year, “Toyota announced it would relocate its U.S. headquarters from the Los Angeles suburb of Torrance to a Dallas suburb with $40 million in incentives.”

In addition to tax incentives, the decision by Tesla executives will be based on other factors, such as environmental reviews and duration of the approval process.

Even companies benefitting from tax incentives have to deal with taxes. Learn how an automated sales tax solution works.

photo credit: Coneee via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.