Georgia judge rejects tax exemption for electric truck company Rivian

ATLANTA — A Georgia judge has rejected a deal that would have provided a large property tax break to Rivian Automotive, clouding the upstart electric truck maker’s plans to build a plant east of Atlanta.

Morgan County Superior Court Judge Brenda Trammell Rejected what is normally a routine request from a local government to validate a bond deal, ruling Thursday that the development authority that brought the case had failed to prove that the $5 billion plant, projected to employ 7,500 people, was “sound, reasonable, and feasible” as required by state law.

Trammell also ruled that under state law, Rivian should be required to pay regular property taxes due to its level of control over the property it would lease to the development authority, undermining the reason the development was initiated. legal action first.

Rivian declined to comment.

The Georgia Department of Economic Development and a four-county local joint development authority that recruited Rivian said they were “disappointed and respectfully disagree with Judge Trammell’s decision. They said they will not give up on their plans and are considering appealing.

“We remain steadfast in our efforts to bring good-paying American manufacturing jobs to Georgia, and we are currently evaluating all legal options,” the groups said.

The Irvine, California-based electric vehicle maker announced last year that it would build the facility on a 2,000-acre (800-hectare) site in Morgan and Walton counties, about 45 miles (70 kilometers) east of Atlanta. along Interstate 20. produce up to 400,000 vehicles a year there. Rivian, which also has a plant in Normal, Illinois, had hoped to start this summer and begin production in 2024.

By retaining ownership of the property and leasing it to Rivian, the local governments would exempt Rivian from a projected $700 million in property taxes over 25 years, although Rivian agreed to make $300 million in payments in lieu of taxes over the period.

The property tax break is a key part of the $1.2 billion in tax breaks and incentives that Georgia and local officials have offered Rivian to build a plant in the state.

The long-used maneuver circumvents a prohibition in the Georgia state constitution on giving “gratuities” to businesses or individuals. If Trammell’s order requiring normal property taxes is upheld, it could call into question other big tax breaks and prevent officials from using the tool in the future.

The state also plans to spend $200 million to buy the site and prepare it. Rivian could claim a projected $200 million tax credit and $280 million in sales tax exemptions for construction machinery and materials. The state also plans to spend $90 million to build a job training center and train workers.

The judge found persuasive arguments from a group of local residents who oppose the development of the plant, saying it will ruin their quality of life in a rural area now encroaching on sprawling Atlanta.

“It’s very gratifying that we local citizens have been able to come together to do so much research to bring in a great legal team and bring us fantastic results like these,” said JoEllen Artz, president of opposition group Morgan Land, Sky and Preservation. of the water. Artz and other opponents weighed in on the lawsuit to challenge the appropriateness of a proposed tax relief deal by a four-county joint development authority that helped recruit Rivian.

The company has struggled to ramp up production in Illinois and its once-soaring share price has plunged with some key investors dumping their shares.

Trammell wrote that local and state officials appeared not to have considered the higher utility costs that local governments would incur, or whether Rivian had the money to complete the project.

“Rivian’s cash reserves are rapidly depleting, casting serious doubt on whether it will be able to start, let alone complete, the project,” Trammell wrote.

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