Fort Bend Approves 35-Year Tax Relief Package for Tesla Solar Plant
County commissioners approved four agreements Thursday that could waive $276.5 million in taxes on equipment for a proposed $10 billion facility near Richmond.
By Olga Kaur ·
Fort Bend County residents will see no property tax revenue from equipment at a proposed Tesla solar factory for at least a decade under a package of agreements county commissioners approved Thursday. The 4-0 vote covers four agreements, including a Chapter 312 abatement and a Chapter 381 incentive deal, that could extend tax relief for up to 35 years.
The package applies only to equipment and other tangible personal property at the site southwest of Houston. Tesla's filing lists $8.6 billion of that investment as personal property and $1.52 billion as real property. Land and buildings at the site remain taxable throughout the term.
For the first 10 tax years, the county waives 100% of property taxes on equipment. The start year defaults to 2029 but can move to 2031 without a new county vote. After that period, the county collects the taxes and returns 90% to Tesla as an annual grant for 20 years, keeping 10% for its general fund. If Tesla averages at least 12,000 employees for two consecutive years in the first decade, the rebate period extends to 25 years, reaching Project Year 35.
Tesla's consultant Kroll estimated in its JETI filing that the project would pay $276.5 million in Fort Bend general taxes over 38 years without incentives, peaking at $16.2 million in 2030. The county's guaranteed minimum under the agreements is $2 million a year.
Tesla first sought a 10-year school property tax limitation under the state's JETI program. The Lamar school district approved that piece in September. The state must still approve the school-tax portion. Interim County Judge Daniel Wong abstained from Thursday's county vote because his engineering firm has worked with Tesla.
Tesla has not confirmed it will build the plant in Texas. In its application, Tesla said the Fort Bend site is "not competitive" with an unnamed site in another state lacking the JETI limitation and local abatements. Fort Bend economic development director Carlos Guzman told ABC13 the county "would've been eliminated from consideration" without the agreements.
Tesla must begin construction by June 30, 2027, start regular commercial production of solar cells by December 31, 2030, and invest $10 billion by the later of the end of 2031 or two years after production begins. Commercial production of the finished facility is targeted for the first quarter of 2029. Jobs are to ramp from 2,500 to 9,712 by the fourth year, at an average of $55 per hour.
The state's approval of the school-tax limitation remains pending.
The county's abatement covers equipment taxes through Project Year 10, with any extension contingent on Tesla meeting employment thresholds.
Source: Electrek
