Beaumont council authorizes filing to claim $1.27 million federal tax incentive for Tesla battery at wastewater plant
Loading...
Summary
The Beaumont City Council voted unanimously Nov. 13 to authorize the city manager to sign IRS forms to claim a $1,265,679.76 federal tax incentive tied to Tesla’s battery installation at the city wastewater treatment plant after a closed-session briefing about threatened litigation by Corporate Credit Inc.
The Beaumont City Council unanimously authorized the city manager on Nov. 13 to execute federal tax forms to claim a $1,265,679.76 tax incentive connected to Tesla’s battery system at the city wastewater treatment plant.
City staff had briefed the council in closed session beforehand on a threatened lawsuit from Corporate Credit Inc. (CCI) related to rights to the project’s incentives. “The Brown Act also requires that we make a record of the threat of litigation,” city staff said when reading the closed-session item, citing Government Code 54956.9 to justify the closed-session discussion.
Bob Patterson, speaking for city staff, told the council the original 2021 agreement allowed Tesla to install the battery facility at no cost to the city and that the project received a state SGIP incentive “for $3,300,000 to Tesla.” Patterson said supply-chain issues later increased the battery pack cost and that Tesla assigned incentive rights to CCI. Patterson said CCI had at one point demanded a larger amount (staff described it as nearly $2.8 million) and had threatened to sue. Patterson said the city engaged a tax consultant and that “if council approves, we will file the required tax forms which are listed in your staff report for $1,265,679.76, which is not the amount that CCI requested. However, that is the amount that we, legally can file for.”
When the council opened the item for discussion, a council member praised staff’s quick work and criticized CCI’s representative for his earlier remarks, calling the representative “disingenuous and unprofessional.” No members of the public called in or submitted written comments on the item.
A council member moved to authorize the city manager to execute IRS Form 990-T (Exempt Organization Business Income Tax Return) with attached Form 3800 and Form 3468, and IRS Form 8879-TE (e-file signature authorization); another council member seconded. The council voted by roll call: Finn — Yes; Martinez — Yes; White — Yes; Mayor Pro Tem Voigt — Yes; Mayor Laura — Yes. The motion carried.
Staff reported no reportable action from the closed session. The meeting adjourned at 5:36 p.m.
