Small Businesses Cry Foul Over Tax Break
Business owners are crying foul over the state of California’s plan to offer an electric car maker a sweet deal as an incentive to keep business in that state.
Tesla will not have to pay state sales tax on the machinery it will use to build its Model S car. With this tax break, the company will be able to save 7 to 9 percent for each piece of equipment it buys for making the Model S.
Naturally other small businesses are not pleased that the state of California is giving Tesla this type of break. They feel as if this kind of tax should be offered across the board.
According to one state government official, California can offer specific incentives to certain companies. This official offered some insight into just how complex these decisions can be: the government must weigh many factors such as whether or not the incentive will take away from important public programs and whether or not they are rewarding a company for something they would have done anyway.
In the case of Tesla, it seems as if the state government was very concerned that the manufacturer would take their business to another state. So they put forth a serious effort to keep them in California.
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