Texas Enterprise Zone Program
Upon a community designating a business as an enterprise project, and upon that project’s designation being approved by the state, the business would be eligible for certain State sales and use tax refunds under the Texas Enterprise Zone Program,
There is a statewide cap of 105 projects per legislative biennium and a community with less than 250,000 in population may have up to four enterprise projects, while a community with 250,000 in population or greater may have up to six enterprise projects.
An enterprise project is eligible for a refund for all state sales and use taxes paid and used at the qualified business site. The total amount of any refund will continue to be predicated on investment amount and number of jobs created/retained. The refund can be an amount ranging from a minimum of $2,500 per job to a maximum of $7,500 per job as follows:
If project investment amount is equal to or greater than $250 million, then refund amount is $7,500 per job up to a maximum of 500 jobs created/retained. Receipts for purchases of building materials and machinery and equipment and payroll information are required to be retained as part of the audit process.
(NOTE: All contracts should separate the costs for building materials and/or equipment from the costs of labor and services in order to be eligible.) The refund for sales and use tax must be for all eligible items for use at the qualified business site.
Texas Capital Fund
The Texas Capital Fund Program, an economic development tool designed to provide financial resources to non-entitlement communities, primarily rural communities and counties like Corsicana and Navarro County. It is administered by the Texas Department of Agriculture.
The Texas Capital Fund Infrastructure Program is an economic development tool that provides grants for infrastructure development to create or retain permanent jobs in primarily rural communities and counties. Funds from this program can be utilized for public infrastructure (water, sewer, roads, etc.) needed to assist a business which commits to create and/or retain permanent jobs, primarily for low and moderate-income persons. The minimum award is $50,000 and the maximum is $1.5 million, and the award may not exceed 50 percent of the total project cost.
The Texas Capital Fund Real Estate Development Program provides a zero-interest loan for up to 20 years to fund real estate acquisition or improvements to create or retain permanent jobs in primarily rural communities and counties. Funds can be used by communities and counties for acquisition, new construction or rehabilitation. Awards range from $50,000 to $1.5 million.
The Texas Capital Fund Downtown Revitalization Program awards matching grant funds for public infrastructure to foster and stimulate economic development in rural downtown areas. Awards range from $50,000 to $150,000.
The Texas Capital Fund Main Street Improvements Program awards funds for public infrastructure in the applicant's Main Street area, as well as aiding in eliminating handicap barriers and deteriorated conditions in the downtown area.
State Sales & Use Tax Exemptions
Manufacturing Machinery & Equipment. To qualify for a manufacturing exemption, the taxpayer must manufacture, fabricate or process tangible personal property for sale; repair tangible personal property from their own inventory for sale (rebuilders); or repair tangible personal property from their own inventory for rental.
The manufacturing exemption does not extend to contractors, persons who repair property belonging to others and service providers (such as data processors and nonresidential remodelers) even when they manufacture tangible personal property for use in performing their services. Separately stating manufactured repair parts on a customer's invoice does not make the taxpayer a manufacturer eligible for this exemption. Click on link For more information.
Natural Gas & Electricity. Texas companies are exempt from paying state sales and use tax on electricity and natural gas used in
manufacturing, processing, or fabricating tangible personal property. The company must complete a “predominant use study” that shows that at least 50 percent of the electricity or natural gas consumed by the business directly causes a physical change to a product. Natural gas and electricity manufacturing exemptions are administered through the Comptroller of Public Accounts. Click on link for more detailed information.
Pollution Control Equipment Incentive
A Texas constitutional amendment providing an exemption from property taxation for pollution control was approved in 1993. The intent was to ensure that compliance with environmental mandates, through capital investments, did not result in an increase in a facility’s property taxes.
A facility must first receive a determination from the Texas Commission on Environment Quality (TCEQ) that property is for pollution control purposes. That positive use determination is then provided to the local appraisal district, which must accept the TCEQ’s decision and grant the property an exemption from property taxes.
To be eligible for a positive use determination, the property must have been purchased, acquired, constructed, installed, replaced, or reconstructed after January 1, 1994 to meet or exceed federal, state, or local environmental laws, rules, or regulations. The positive use determination is provided to the local appraisal district, which must accept the TCEQ's decision and grant the property an exemption from property taxes.
The Pollution Control Equipment Incentive is administered through the Texas Commission on Environmental Quality (TCEQ).
Click on link For more detailed information on the Pollution Control Equipment incentive, or contact:
Tax Relief for Pollution-Control Property, MC 110
P.O. Box 13087, Austin, TX 78711
Renewable Energy Incentives
Renewable energy incentives are administered through the State Energy Conservation Office (SECO). Various tax exemptions, franchise tax exemptions, and franchise tax deductions are available for renewable energy equipment and systems. Renewable energy encompasses solar, wind, ethanol, and biodiesel energy.
A franchise tax exemption is available to manufacturers, sellers, or installers of solar energy devices. The state also permits a corporate deduction from the state's franchise tax for renewable energy sources. Business owners may deduct the cost of the system from the company's taxable capital or deduct 10 percent from the company's income. Wind energy can qualify under the term "solar energy" for the exemption and deduction.
Texas property tax code permits a 100 percent exemption on the appraised value of solar, wind or biomass energy devices installed or constructed for the production and use of energy on-site. See Texas property tax Form 50-123, "Exemption Application for Solar or Wind-Powered Energy Devices" to claim this exemption.
Texas also offers a loan program to fund energy retrofits in public buildings. The "LoanSTAR" program is targeted to state agencies, school districts, higher education, local governments, and hospitals for financed energy retrofits that pay for themselves in energy cost savings over time.
For more information on the tax exemption, visit the State Energy Conservation Office website, or contact the Comptroller of Public Accounts.
Moving Image Industry
The Texas Moving Image Industry Incentive Program provides qualifying film, television, commercial, visual effects and video game productions the opportunity to receive a cash grant based on a percentage of a project’s eligible Texas expenditures, including eligible wages paid to Texas residents. Grants vary by budget levels and types of productions, and are issued upon completion of a review of the project's Texas expenditures. This incentive program is in addition to Texas' Sales Tax Exemptions.
Available for review at the Texas Film Commission website are the specific eligibility qualifications for projects, including investment thresholds, employment requirements and content. Specific incentive enhancements related to underused areas are provided.