In 2020, Travis County, Texas, promised Tesla a wonderful gift: a 20-year tax break for the company’s massive Texas Gigafactory, which was then to be built there. Currently, that waiver is being reviewed, according to the Austin American-Statesman, as Tesla is reportedly not handing over some data it originally agreed to provide.
Travis County is the county that contains Austin, and if you can focus your mind on 2020, you might be able to remember some context for it. CEO Elon Musk was angered by the existence of COVID-era restrictions in Alameda County in California’s Bay Area, where his Fremont Tesla plant was located. “If we retain Fremont manufacturing activity will depend on how Tesla is treated in the future,” he tweeted in May that year.
For the record, yes, he kept the Fremont factory open, but two months after that threat, he announced he was building the Texas Gigafactory. Then that December, he moved to Tesla headquarters and himself to the Austin area. He moved Tesla’s legal base to Texas in 2024. And now Tesla is actually a Texas-based company – Musk is slowly moving his entire portfolio of companies there as well.
Well, this is all a throwback to when Musk tried to make Texas fall in love with him in his 20s. He failed to win Tesla-friendly policies in Texas in 2013, and in 2014, he chose Nevada instead of Texas as the location for the Gigafactory.
But in 2020, just as he was shifting culturally to the right, and explosively ending his long romance with California, Travis County made him a tax deal: Tesla would get a 70% break on property taxes provided it invested $1.1 billion in Travis County. As additional billions of dollars of investment climb, the exemption for related taxes will increase to 75%, and then mature to 80% once investments exceed $2 billion. According to the American-Statesman, Tesla had to create a certain number of jobs at a certain salary, make some investments in the area and follow all federal and state regulations.
Travis County Commissioner Margaret Gomez told the American-Statesman Tesla has not provided the county with documentation to prove it has met its standards in keeping with the rebate agreement. In fact, the company is trying to “exit” this liability, according to the useful terminology provided by Gomez. According to that report, “They don’t have this, they don’t have that. Well, a company like that has to be good at keeping records and telling you exactly what they’ve accomplished.”
A Wall Street Journal article from about a year ago may provide some insight. Keeping in mind that Tesla could jeopardize tax breaks if it violates state and federal environmental laws, it may be notable that Tesla “discharged toxic pollutants into the environment near Austin for months” in 2022, according to the Journal. “Chemicals were also flowing untreated into the city sewer, in violation of state guidelines.”
Amanda Marzullo, a local attorney, told the American-Statesman that the Wall Street Journal story points to potential violations, but that she believes the county has been too lax in its agreement with Tesla. “It should be renegotiated toward creating a stronger contract,” he said.
If it seems like Marzullo is playing politics, she is playing politics. The American-Statesman says she is part of the Tesla takedown protest movement, and is running for the commissioner seat.
The stakes of this review are huge for Tesla. According to the American-Statesman, the company will not receive any rebate money until the process is complete.
Gizmodo contacted Tesla for comment, and will update if we hear back.