Tesla will bring almost $10 million dollars to Lubbock County as the automaker found a West Texas home for processing new vehicle titles statewide.
“Tesla is very ready to get an agreement. They need something done and they need something done quick. They have approximately 5,000 pending transactions,” said Ronnie Keister, the county’s tax assessor collector last week.
Monday morning, county commissioners approved 10 new employees for Keister to process the titles. The vote was unanimous.
The new employees will cost around $1 million to bring in an expected $9.5 million. County Judge Curtis Parrish previously said the county’s upcoming budget will fall short by up to $19 million – if road and building repairs are included.
The commissioners’ vote followed meetings last week between Lubbock officials, Tesla and its partner Centex Auto Title. Even Texas Tech coaches Joey McGuire and Grant McCasland were involved.
Beyond processing titles, Keister hopes Tesla officials are comfortable becoming part of the community and expanding their presence in Lubbock.
“The great thing about this is in the short term, yes, we’re getting sales tax dollars. But in the long run, we’re hoping to build that relationship with Tesla where we’re not just doing title work for them – where Tesla establishes a presence in the city in some way,” Keister said.
How Lubbock County gets nearly $10 million
“The numbers from Tesla indicate that they do about 50,000 titles a year, about $190 million in sales tax,” Keister said of the automaker’s Texas sales.
The Texas Tax Code gives Lubbock County a 5 percent commission of the vehicle sales tax.
“… Which would be roughly $9 and-a-half million in sales tax retention to Lubbock County,” Keister said.
Even before Tesla, that 5 percent commission is a big money maker for Lubbock County,
“Our office did approximately 80,000 titles, $100 million in sales tax,” Keister said of the numbers for the last year, most of it in Lubbock County.
The county’s portion of that is $5 million.
Public records released online Thursday – alongside the agenda for Monday’s meeting said, “Per discussion with the Commissioners, Tesla is bringing over 50,000 titles to Lubbock County. These needed employees will ensure that we have adequate staffing.”
- 7 new employees with base salary of $42,848.
- 2 new employees with base salary of $34,278.
- 1 new employee with base salary of $49,922.
Keister did not know the exact dollar figure when health insurance and other costs are factored in. The projected expense is just under a million dollars for the county.
Courting Tesla
“We’d heard that Tesla was looking. Tesla, through their vendor Centex Title, reached out to us and said, ‘Hey, we need somewhere to do all of these title transactions. Are you interested?’ I happened to be in Austin at the time,” Keister said.
He set up a meeting in mid-July. Things went well and Tesla followed up.
“Tesla came along with their vendor [Centex] to Lubbock on Monday and Tuesday [last week]. They had great meetings with commissioners,” Keister said.
The mayor, city council members, officials from the Lubbock Chamber of Commerce, the Lubbock Economic Development Alliance and Wolfforth did the same.
Tesla wanted to know, “How do we view business? Do we want this? … And I think they heard a resounding ‘yes’ from everybody involved. And they left very happy with the community. They felt very welcomed,” Keister said.
Why does Lubbock get to do this?
State law generally forbids vehicle manufacturers from owning their own dealerships. But that’s Tesla’s business model. So Tesla uses a technicality.
A new Tesla sold to a Texan comes from out-of-state. And there’s always been a procedure for Texans to get a title when buying from another state.
Any willing county can handle out-of-state titles – not just the county where a customer lives, according to the state’s Motor Vehicle Title Manual.
Until now, Tesla-partner Centex processed new vehicle titles in Travis County. That changed dramatically last month.
Travis County announced: “Beginning July 8, the Travis County Tax Office motor vehicle division will serve and support the Travis County community exclusively. The tax office will process motor vehicle transactions only for record holders, buyers, sellers, or lienholders with Travis County addresses.”
Centex needed a new “willing” tax assessor at least for customers outside of Travis County.
The Travis County announcement did not give a reason, but there has been tension between the county and Tesla in the news including reports from the KXAN, the Texas Standard and the Wall Street Journal – issues ranging from environmental concerns to a deadly workplace accident last year.
