In 2014, Elon Musk secured $1.3 billion in tax grants from the state of Nevada to open a battery plant, this caught the attention of Jeff Bezos. Bezos grew green with envy over Musk’s ability to pit five states against each other in the form of tax incentive packages. As a result, Bezos couldn’t help but question why it was regularly accepting comparatively minuscule incentives.
In 2017, an executive sent a congratulatory email in 2017 praising his team for securing $40 million in government incentives to build a $1.5 billion air hub near Cincinnati. In contrast, the modest figure truly bothered Bezos, and made him hell bent to try something new.
May The Tax Grant Games Begin…
Later that year, Amazon announced a search to find a home for its second headquarters (HQ2). This would entail the creation of 50,000 new jobs and a pledge to invest $5 billion.
Amazon made it abundantly clear that it was looking for tax grants. However, This did not stop cities around North America engaged in a hunger games esque challenge to win Amazon. In the end, a staggering 238 cities across the continent submitted bids. In the end Amazon decided to split the HQ2 between New York and Virginia. Amazon would ultimate pull the plug on New York after politicians attacked the $3 billion in incentives offered.
Amazon was scrutinized upon failing to court New York politicians. Individual’s familiar with Amazon’s effort say the team drank too many glasses of its own kool-aid. Executives abandoned reciprocity lessons learned over the years to help win major tax breaks. Unfortunately, they believed every city would welcome Amazon with open arms. This left taste of entitlement in the mouths of government officials.
Not a total loss, Amazon walked away with $762 million in incentives from Virginia. At this time, Amazon is $100 million shy of the $2.4 billion Tesla has amassed in handouts.
In case you missed it, check out our recent post about the recent rise in Tesla’s stock price
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