Travis County’s tax rebate deal with Tesla is under review as the automaker has failed to provide sufficient documentation that it is upholding its end of the agreement, Travis County officials said.
The deal, which was finalized in 2020, offers Tesla a 70% property tax rebate on a the first $1.1 billion the company invests in the factory and up to 80% if Tesla invests more than $2 billion. The rebate only applies to a portion of property taxes paid to the county.
Tesla must also ensure at least half of its gigafactory employees live in Travis County and are paid at least $15 an hour. Tesla agreed to scale its minimum wage over time in accordance with the Consumer Price Index.
In 2020, the county estimated the deal would result in $14 million in savings for Tesla over the first 10 years of the agreement. So far, Travis County hasn’t paid Tesla any rebates. As first reported by the Austin-American Statesman, the agreement is under a compliance review because Tesla has not provided sufficient documentation to prove it is meeting the requirements.
Travis County also has active tax rebate agreements with Apple, Samsung and HID Global, a manufacturer of secure identity products. County spokesperson Hector Nieto said compliance reviews are a normal part of the process, and rebate payments to those companies have usually occurred within the same year the companies submit annual reports.
Travis County officials declined to specify which parts of the deal Tesla may be failing to uphold or provide documentation for. In a statement, Nieto said the review includes “verification of multiple data points submitted in the compliance report.”
In a statement, Commissioner Margaret Gomez said she will “push on staff” to determine if Tesla is in compliance.
“Should they not be meeting their legally binding requirements, I will want to see all our legal options and then work with this Commissioners Court to move quickly, because it is my duty to protect the public’s tax dollars and their best interests,” she said.
Tesla did not immediately respond to requests for comment.
Travis County Commissioners lured Tesla to move its headquarters from Palo Alto to Southeastern Travis County with the agreement.
Before the gigafactory was built, the land it sits on was a sand and gravel mining site that brought in about $6,400 of estimated property tax revenue per year, according to county documents. The property tax revenue Tesla brings far exceeds $6,400, even with a rebate.
At the time, Travis County Commissioner Jeff Travillion called the deal a “transformational process” that would bring money and opportunity to one of the county's lowest-income zip codes. Commissioner Brigid Shea said it would provide job opportunities to people without college degrees.
“They are stuck in underemployment and underpayment and uninsured conditions that make it extremely difficult for them to get ahead,” Shea said in 2020. “And I think that’s a profoundly important part of this deal.”
The deal passed 4-0; Gomez abstained from voting.
But now Travis County residents argue the deal doesn’t serve the area. At an August commissioners court meeting, community members urged the court to find ways to end the deal, citing hazardous working conditions and environmental violations.
Tesla was fined nearly $50,000 for not upholding safety standards after an employee died at the Gigafactory in 2024. Tesla was also fined nearly $7,000 by the U.S. Department of Labor in 2024 for exposing its workers to hazardous chemicals.
“Should the city of Austin be rewarding Tesla for participating in poor worker conditions or advocating for their own rights?,” resident Christina DeStefano said. “Do we want to stand behind laborers, advocating for safe work environments and humane wages?”
Travis County resident Ethan McBride called the deal “legalized theft.”
“Travis County residents right now are worried about the fiscal health of our local government,” he said. “I think we can all agree now is not the time to hand out millions in tax breaks to billionaires and their trillion dollar plus corporations.”
