Fort Bend Commissioners Grant Tesla $276.5 Million Tax Break Before Construction Begins

Fort Bend County commissioners approved a four-part agreement Thursday that provides up to 35 years of tax relief for Tesla’s proposed $10 billion solar manufacturing facility near Richmond. The vote passed 4-0, although Tesla has not yet confirmed it will build the plant in Texas.

The package includes a Chapter 312 abatement that waives 100% of county property taxes on equipment for the first 10 tax years. The start year defaults to 2029 but can be delayed to 2031. Tesla’s filing lists $8.6 billion of personal property subject to these waivers, while land and buildings remain fully taxable at all times.

After the initial abatement period, the county will return 90% of the taxes Tesla pays on its equipment as an annual grant for 20 years. The county keeps the remaining 10% for its general fund. If Tesla maintains an average of 12,000 employees for two consecutive years within the first decade, the first five years of the rebate become a full grant and the deal extends to 35 years.

To retain these benefits, Tesla must begin construction by June 30, 2027, and start commercial production of solar cells by December 31, 2030. The company must also invest $10 billion by the later of the end of 2031 or two years after production begins. Jobs are slated to reach 9,712 by the fourth year, with an average hourly wage of $55.

Tesla’s consultant Kroll estimated the project would generate $276.5 million in general taxes over 38 years without incentives. This amount peaks at $16.2 million in 2030. The county’s guaranteed minimum revenue from the deal is set at $2 million per year.

Interim County Judge Daniel Wong abstained from the vote because his engineering firm has worked with Tesla. The Lamar school district already approved the separate 10-year school property tax limitation under the state’s JETI program in September. The state must still approve that school-tax portion.

Fort Bend economic development director Carlos Guzman told ABC13 that the county would have been eliminated from consideration without these agreements. Tesla cited a competing site in another state as "not competitive" due to the lack of similar local abatements.