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Enterprise Zones

 

Atlanta Enterprise Zone

The City of Atlanta has qualified with the Texas Department of Economic Development to designate areas within the city's jurisdiction as enterprise zones.  The Atlanta Enterprise Zone has been approved through the State of Texas Enterprise Zone Program. Qualified businesses located in the Atlanta Enterprise Zone may become qualified as an Enterprise Project by the Texas Department of Economic Development, provided: the Qualified Business is active in the zone, and at least 25 percent of its new positions must be for employees that are residents of any zone within the city or county's jurisdiction, or economically disadvantages as defined by state law. The City or County submits applications for businesses desiring designation as an Enterprise Project. Enterprise Projects may receive up to $1.25 million in refunds of state sales and use tax, at a rate of $2,000 for each new, permanent job created. The maximum refund is $250,000 per year for five years, based on taxes paid on the purchase of machinery, Equipment, and building materials used by the business in the zone. The state may also provide a franchise tax reduction of either 50 percent of the increased apportioned taxable capital or 5 percent of the apportioned earned surplus income to enterprise projects.  Contact: Atlanta City Development Corporation, (903) 796-6041, www.atlantatexas.com/sections/advantages/incentives.html#atlantazone

 

Bowie Enterprise Zone

The City of New Boston has qualified with the Texas Department of Economic Development to designate areas within the city's jurisdiction as enterprise zones.  The New Boston Enterprise Zone has been approved through the State of Texas Enterprise Zone Program. Qualified businesses located in the New Boston Enterprise Zone may become qualified as an Enterprise Project by the Texas Department of Economic Development, provided: the Qualified Business is active in the zone, and at least 25 percent of its new positions must be for employees that are residents of any zone within the city or county's jurisdiction, or economically disadvantaged as defined by state law. The City or County submits applications for businesses desiring designation as an Enterprise Project. Enterprise Projects may receive up to $1.25 million in refunds of state sales and use tax, at a rate of $2,000 for each new, permanent job created. The maximum refund is $250,000 per year for five years, based on taxes paid on the purchase of machinery, equipment, and building materials used by the business in the zone. The state may also  provide a franchise tax reduction of either 50 percent of the increased apportioned taxable capital or 5 percent of the apportioned earned surplus income to enterprise projects.  Contact: (903) 628-6718.

 

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Jefferson Enterprise Zone

The City of Jefferson has qualified with the Texas Department of Economic Development to designate areas within the city's jurisdiction as enterprise zones.  The Jefferson Enterprise Zone has been approved through the State of Texas Enterprise Zone Program. Qualified businesses located in the Jefferson Enterprise Zone may become qualified as an Enterprise Project by the Texas Department of Economic Development, provided: the Qualified Business is active in the zone, and at least 25 percent of its new positions must be for employees that are residents of any zone within the city or county's jurisdiction, or economically disadvantaged as defined by state law. The City or County submits applications for businesses desiring designation as an Enterprise Project. Enterprise Projects may receive up to $1.25 million in refunds of state sales and use tax, at a rate of $2,000 for each new, permanent job created. The maximum refund is $250,000 per year for five years, based on taxes paid on the purchase of machinery, equipment, and building materials used by the business in the zone. The state may also  provide a franchise tax reduction of either 50 percent of the increased apportioned taxable capital or 5 percent of the apportioned earned surplus income to enterprise projects.  Contact: (903) 665-3922, www.edcoinfo.com/CEDocuments/Downloads_GetFile.aspx?id=329411&fd=0

 

Marshall Enterprise Zone

The City of Marshall has qualified with the Texas Department of Economic Development to designate areas within the city's jurisdiction as enterprise zones.  The Marshall Enterprise Zone has been approved through the State of Texas Enterprise Zone Program. Qualified businesses located in the Marshall Enterprise Zone may become qualified as an Enterprise Project by the Texas Department of Economic Development, provided: the Qualified Business is active in the zone, and at least 25 percent of its new positions must be for employees that are residents of any zone within the city or county's jurisdiction, or economically disadvantaged as defined by state law.  Enterprise Projects may receive up to $1.25 million in refunds of state sales and use tax, at a rate of $2,000 for each new, permanent job created. The maximum refund is $250,000 per year for five years, based on taxes paid on the purchase of machinery, equipment, and building materials used by the business in the zone. The state may also  provide a franchise tax reduction of either 50 percent of the increased apportioned taxable capital or 5 percent of the apportioned earned surplus income to enterprise projects.  Contact: (903) 935-4456

 

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Property Tax Abatement

The counties of North East Texas have designated Reinvestment Zones within their respective jurisdictions that allow them to negotiate property tax abatements based on job creation, average wages, and capital investment.  The designation of a reinvestment zone for industrial tax abatement is good for five years after the date of the designation and may be renewed for periods not to exceed five years, except that a reinvestment zone in a state enterprise zone is designated for the same period as a state enterprise zone.  Tax abatement agreements under this program may provide for the exemption of real property and tangible personal property located on the real property, only to the extent that its value for that year exceeds its value for the year in which the agreement is executed.   For county contact information, go to: www.naco.org/Template.cfm?Section=Find_a_County&Template=/cffiles/counties/state.cfm&statecode=tx

 

Goods in Transit

The Texas Freeport exemption allows local governing bodies the option to exempt personal property consisting of goods, wares, merchandise, or ores other than oil, natural gas, and petroleum and certain aircraft and aircraft parts. Freeport property qualifies for an exemption from property (ad valorem) taxation only if it has been detained in the state for 175 days or less for the purpose of assembly, storage, manufacturing, processing, or fabricating.

 

Machinery and Equipment

Texas grants sales and use tax exemptions on machinery and equipment utilized directly in the manufacturing process. Purchases of machinery and equipment, replacement parts, and accessories and that are used or consumed directly in the manufacturing, processing, fabricating, or repairing of tangible personal property for ultimate sale (and if the use or consumption of the property was necessary or essential to the manufacturing, processing, fabrication, repair, or operation, or to a pollution-control process) are exempt from state and local sales and use tax.  Natural gas and electricity are exempt from sales taxes when sold to commercial businesses that "predominantly" use the gas or electricity in manufacturing.
 

Energy and Fuel Conservation Measures
A corporation solely engaged in the business of manufacturing, selling, or installing solar energy devices is exempted from the franchise tax.
 

Solar Energy – A taxable entity may deduct from its apportioned taxable margin 10% of the amortized cost of a solar energy device if the device is used in state; is acquired for heating, cooling, or production of power; and is amortized for a period of at least 60 months.
 

Natural Gas and 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 is used in the manufacturing process.

 

For more information, contact Office of the Governor, Office of Economic Development & Tourism, (512) 936-0100, http://governor.state.tx.us/ecodev/