Friday, October 30, 2009

$30 Million in Tax Breaks Lures Tesla to SoCal

Where is uber-chic electric car maker Tesla going to site its new assembly plant? Southern California, for sure, but it remains to be seen if a dormant Boeing facility in Long Beach or the Downey Studios in Downey will be the winner of the Tesla sweepstakes which carries a prize of 1,400 new jobs created.

Here's how it works:

Tesla will buy $320 million in equiment it needs to outfit the plant. It will then convey title of that equipment (i.e., "give") to the CAEATA, which under its charter, pays no sales tax. Then the CAEATA will give the equipment back to Tesla, so nobody ends up paying the 9% sales tax on the $320 million.

Apparently it's legal.

Read the story in the San Gabriel Tribune:

Tesla gets tax break, hopes to open plant in Southern California [San Gabriel Tribune]