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Georgia judge rejects tax break for Rivian electric truck plant

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A Georgia judge has rejected a proposed tax break for Rivian the automaker would have received as part of a deal to build a new factory in the state, the Associated Press reported Friday.

Morgan County Superior Court Judge Brenda Trammell rejected what is normally a routine request by the local government to validate a bond agreement, according to the report, ruling that the Joint Development Authority (JDA) of Jasper, Morgan, Newton, and Walton counties in charge of the project hadn’t proved the $5 billion factory, which Rivian has said will create 7,500 jobs, was “sound, reasonable, and feasible,” as required by state law.

Rivian R1T pre-production

The judge also ruled that Rivian should pay regular property taxes because of its level of control over a property it would be leasing from the development authority. The authority had planned to maintain ownership and lease the 2,000-acre factory site 45 miles east of Atlanta to Rivian, exempting the automaker from a projected $700 million in property taxes over 25 years, according to the AP. Rivian reportedly agreed to make $300 million in payments in lieu of taxes during that period.

That is part of a proposed $1.2 billion in tax breaks and incentives state and local governments offered to Rivian to build the factory, which was announced late last year and is due to start producing vehicles in 2024, with annual production capacity of 400,000 vehicles supplementing Rivian’s existing factory in Normal, Illinois. Rivian confirmed in May that its R2 family, aiming for affordability and efficiency, will first be built in Georgia.

Officials told local news station WSBTV Friday that they didn’t think the ruling would impact the project.

Rivian builds first customer example of R1T - September 2021

Rivian builds first customer example of R1T – September 2021

While any company would be inclined to go where the incentives are, Rivian is very cash-flush right now. In its second-quarter earnings update, the automaker reported that it ended the quarter with $15.4 billion in cash and equivalents.

It’s also worth noting that Rivian can’t sell the electric trucks it plans to make in Georgia without franchise-law overhaul—and an effort to revamp franchise laws in the state stalled last spring.

That makes Rivian about as welcome as Tesla in Texas—as the automaker still has to sell its cars in the state via workarounds, despite now building them in the state capital of Austin.

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