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Tax Incentives
Texas Enterprise Zone Program
The Texas Enterprise Zone Program is an economic development tool for local communities to partner with the State of Texas to promote job creation and capital investment in economically distressed areas of the state.
Related Documents
Texas Enterprise Zone Program Overview
Texas Enterprise Zone Approved Projects
Texas Enterprise Zone Project Map
Participation
Local communities must nominate a company as an Enterprise Project to be eligible to participate in the Enterprise Zone Program. Legislation limits allocations to the state and local communities per biennium. The state accepts applications quarterly with deadlines on the first working day of March, June, September and December.
Benefits to Participation
Designated projects are eligible to apply for state sales and use tax refunds on qualified expenditures. The level and amount of refund is related to the capital investment and jobs created at the qualified business site.
|
Level of Capital Investment |
Maximum number of jobs allocated |
Maximum potential refund |
Maximum refund per job allocation |
|
$40,000 to $399,999 |
10 |
$25,000 |
$2,500 |
|
$400,000 to $999,999 |
25 |
$62,000 |
$2,500 |
|
$1,000,000 to $4,999,999 |
125 |
$312,500 |
$2,500 |
|
$5,000,000 to $149,999,999 |
500 |
$1,250,000 |
$2,500 |
|
Double Jumbo Project $150,000,000 to $249,999,999 |
500 |
$2,500,000 |
$5,000 |
|
Triple Jumbo Project $250,000,000 or more |
500 |
$3,750,000 |
$7,500 |
In addition, local communities must offer incentives to participants under the Enterprise Zone Program, such as tax abatement, tax increment financing and one-stop permitting.
Participation Requirements
- Communities may nominate projects, for a designation period up to five years, non-inclusive of a 90-day window prior to the application deadline. Employment and capital investment commitments must be incurred and met within this timeframe.
- Projects may be physically located in or outside of an Enterprise Zone.
- If located within a zone, the company commits that at least 25% of their new employees will meet economically disadvantaged or enterprise zone residence requirements.
- If located outside of a zone, the company commits that at least 35% of their new employees will meet economically disadvantaged or enterprise zone residency requirements.
- Under limited statutory provisions, an enterprise project designation may be granted for job retention.
Click here for more information regarding the Texas Enterprise Zone Program.
Defense Economic Readjustment Zone Program
The Defense Economic Readjustment Zone Program (DERZ) was established as a tool for business recruitment and job creation in adversely impacted defense dependent communities. It is designed to provide assistance to Texas communities, businesses and workers impacted by, or vulnerable to, the closure or realignment of military installations and the reduction of federal defense contracting expenditures.
Benefits to participation
Designated readjustment projects are eligible to apply for franchise tax credit and state sales and use tax refund on qualified expenditures. The level and amount of the credit/refund is related to the sales and use tax on qualifying expenditures and the number of jobs created/retained at the site.
- The number of jobs eligible for a refund will not exceed 500 or a number equal to 110% of the anticipated new permanent/retained jobs.
- The maximum refund per allocated job is $2,500.
Local communities may also offer benefits to participants under the defense economic readjustment zone program as well. These may include tax abatement, tax increment financing, one-stop permitting and others.
Participation Requirements
- A community must nominate and receive designation as a Defense Economic Readjustment Zone and provide specific information as required by statute.
- A company must receive nomination from their local community.
- Applications for readjustment zone or project designation may be filed with the department on any day.
- DERZ's are designated for a period of seven (7) years with no limitation on the number of zones.
- A DERZ may have no more than two defense readjustment projects.
- DERZ projects may be designated for up to a five (5) year period, in addition to a 90 day window prior to the designation date. Employment and community commitments must be met within this time-frame.
- At least 25% of the qualified business new employees in the DERZ must be residents of the governing jurisdiction; economically disadvantage; or dislocated defense workers.
For more information on the Defense Economic Readjustment Zone Program please visit:
http://governor.state.tx.us/ecodev/financial_resources/tax_incentives/
Federal Enterprise Zone / Renewal Community Program
The Federally Designated Empowerment Zone and Renewal Community are Federal interagency efforts focused on the creation of self-sustaining, long-term development in distressed urban and rural areas throughout the Nation. The program uses a combination of Federal tax incentives to assist participating communities in development, reinvigoration, and growth. These Federal Designations are recognized through December 31, 2009.
For more information on the Federal Enterprise Zone / Renewal Community Program please visit:
http://governor.state.tx.us/ecodev/financial_resources/tax_incentives/
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