The Nevada Governor’s Office of Economic Development has reportedly granted $105.6 million in tax incentives for the American lithium battery recycling firm Redwood Materials. As reported by Top Car News, the grant commits the firm to invest more than $1.1 billion in expanding the Tahoe-Reno Industrial Center in Storey County.
“This investment in Nevada is an affirmation of the importance our state plays in the global lithium industry economy. While the state is issuing a $105 million abatement, we are projecting the return on investment will be $5.6 billion for Nevada.”
Governor Steve Sisolak
Redwood’s tax incentives
Redwood Materials secured the following incentives, based on the documents obtained by the Reno Gazette-Journal:
- Sales and use tax abatement: Up to a 100% local sales tax abatement will be granted to Redwood Materials for 15 years ($46.6 million in incentives). Therefore, the entire state and local sales and use tax rate is lowered to 2.75%.
- Modified business tax abatement: Redwood will be given a 10-year 75% wage-related abatement. ($2.8 million in incentives)
- Personal and real property tax abatements: A 75% abatement for about ten years ($54.1 million in incentives)
- Transferable tax credits: Redwood will receive $9,500 transferable tax credits per qualifying employee until June 30, 2025. These credits can also be exchanged or sold to other organizations, usually to help them pay less tax.
Notably, the Economic Development Authority of Western Nevada (EDAWN) backed the application of Redwood Materials for these incentives.
“These incentives are necessary for Nevada to compete with other locations for this large-scale project, which has gained national and international attention and interest. Redwood plans to grow throughout the world and this presents Nevada with a unique opportunity to grow and retain their presence here.”
EDAWN’s senior VP of company retention, expansion, and workforce development, Nancy McCormick
Impact of the project
Approximately $106 million in net direct local and state tax revenue is anticipated from the project. Apart from that, it is also said to provide $77.3 million in net indirect tax revenue.
“By offering the first large-scale domestic sources of these battery materials that can go directly to U.S. battery manufacturers, Redwood Materials will be making Nevada a significant supplier of critical minerals for the nation.”
JB Straubel, Redwood Materials founder and CEO
The project is anticipated to have a total economic impact of $5.6 billion over the following 20 years. It will undoubtedly help Nevada’s goal of reducing reliance on foreign sources for essential battery components.
