California State Treasurer John Chiang said on Tuesday that Tesla motors, an American automotive and energy storage company, will get $39 million in sales tax incentives. The move marks as a new round of government subsidies for a company that has become expert at using those incentives to grow the business.
These tax incentives benefit advanced manufacturing and companies that are associated with altering of energy. Space Exploration Technologies Corp., or SpaceX, run by Elon Musk was also awarded an estimated $30.3 million from the initiative earlier this year.
As per the program, qualified companies are expelled from paying sales and they can use taxes for purchase of certain equipment for up to three years. Both the companies of Musk i.e. SpaceX and Tesla were so far the largest beneficiaries of the program, which awards up to $100 million each year.
Tesla applied for the most recent sales tax exclusion based on over $463 million worth of expected purchases which was linked to the expansion of its Model S and Model X.
Deana Carrillo, executive director of the economic development agency chaired by Chiang said in a statement that the program is specifically designed to retain and expand the pool of high-paying jobs in advanced California industries.
Carrillo, said, “We're the last dollar in. These guys have got to get their financing together, make their decision, buy their property, get ready to buy the equipment, and then we're giving them a benefit at the margin”.