Bastrop County backs SpaceX application for state sales tax incentive

After more than an hour of community feedback on data centers Bastrop County commissioners approved a measure that will support SpaceX's application for state tax breaks through the Texas Enterprise Zone Program.

The details

SpaceX plans to invest $855 million to expand production of next-generation Starlink user terminal kits at its Bastrop County facility, said Damien Barrera, SpaceX's senior tax manager. He said the company plans to produce more than 10 million kits by the end of 2026.

Bastrop County Commissioners approved designating SpaceX as an Enterprise Project, which makes the company eligible to apply for state tax incentives under the Texas Enterprise Zone Project. If SpaceX is selected for the program, it will receive a per-employee refund on state sales tax if it meets program requirements.

The company is seeking Triple Jumbo Project incentives, which require a company to create at least 500 jobs and invest at least $250 million. Qualified companies could receive $7,500 in tax breaks per employee, up to $3.75 million.

SpaceX currently has more than 1,500 employees in Bastrop and has already met its employment requirements, such as hiring at least 35% local employees, Barrera said. Along with ramping up production, the funding would support the creation of North America's largest cleanroom and improvements to infrastructure at the Bastrop facility.

What happened

Bastrop County Commissioner Butch Carmack said the nomination did not provide any local tax abatement to the project.

"We haven't given them anything. They haven't asked for anything," Bastrop County Commissioner Gregory Klaus said. "We don't have any say on any commercial businesses coming into the county."

Precinct 2 Commissioner Clara Beckett added that counties have very little ability to regulate businesses within their jurisdictions if they meet legal requirements. She reiterated that the May 26 vote did not approve local tax breaks or permits, but did make it possible for SpaceX to apply for the state program.

The item was approved unanimously.

What they're saying

Though the item did not specifically mention data centers, most speakers spoke against data centers broadly or against tax abatements for them specifically. Many also called for a moratorium on data centers.

"We are in a drought. We do not need anybody coming in here taking our water," said Rita Ward, who identified herself as a 95-year-old Bastrop resident and lifelong Texan.

Ruth Todd, Democratic candidate for Bastrop County Justice of the Peace Precinct 2, asked the court to protect Bastrop from "billionaires who see Bastrop as cheap land."

"While families are struggling with rising property taxes, rising electric bills, and rising costs everywhere they turn, this court is considering a tax abatement to a billionaire who does not need it," she said

A handful of individuals spoke in support of data centers, citing tax benefits for the county and school district, questioning the political ties of the other speakers or expressing concerns with the accuracy of the detractors' claims.

Separately, the court approved setting a June 8 public hearing to renew the county's tax abatement policy.