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 submit 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 5 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- 041, 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 submit 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 5 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 submit 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 5 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- 2535

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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. The City or County submit 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 5 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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The counties of North East Texas have designated Reinvestment Zones within their respective jurisdictions that allows 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. www.window.state.tx.us/specialrpt/ecodev03/05ch2.html  For county contact information, go to www.naco.org/Template.cfm?Section=Find_a_County&Template=/cffiles/counties/state.cfm&statecode=tx

The following information provides a brief review of the incentives offered by the State of Texas. For more information, contact your CPA, the Office of the Governor Economic Development and Tourism, (512) 936-0100, or the Tyler district office of the Texas Comptroller of Public Accounts: (903) 534-0333

• Machinery and Equipment Sales Tax Exemption – For companies that are predominantly manufacturers, Texas provides sales and use tax exemptions on machinery and equipment utilized in the manufacturing process. Purchases of machinery and equipment, replacement parts, and accessories that have a useful life of more than six months and that are used or consumed in the manufacturing, processing, fabricating, or repairing of tangible personal property for ultimate sale 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 qualify under this exemption.

• Sales tax refunds – The Texas Tax Code provides for state tax refunds for economic development. Some Texas property owners are eligible to receive refunds on their net state sales and use taxes and franchise taxes for paying local school taxes. The total for all refunds collectively may not exceed $10 million, the amount made available by the Texas Legislature. The Comptroller’s office administers the refund program.

• Research and Development Franchise Tax Credit – A corporation may claim a credit for certain incremental qualified research expenses incurred and basic research payments made for research conducted in Texas during the period upon which the tax is based. The credit was 4 percent of qualified expenses on a report before January 1, 2002. The credit changes to 5 percent for reports after January 2, 2002. The credit applies to excess of qualified research expenses in Texas over a base year, plus basic research payments in Texas. Credits may not be combined with the Job Creation credit and may not exceed 25 percent of franchise tax due for reports before January 1, 2002 and may not be more than 50 percent of tax due for reports after January 1, 2002. Credits can be carried forward 20 years.

• Jobs-creation Franchise Tax Credit – This credit equals 5 percent of wages paid for new qualifying jobs created in strategic investments areas. The credit must be claimed in equal installments over five years. Qualifying jobs are in central administrative offices, distribution, data processing, manufacturing, research and development or warehousing. The credit cannot exceed 50 percent of franchise tax due before credits. At least 10 new full-time jobs must be created that pay 110 percent of the county average weekly wage and include health insurance. The credit cannot be combined with the research and development credit.

• Capital Investment Franchise Tax Credit – This is a credit against franchise taxes due equal to 7.5 percent of qualified investment made in a Strategic Investment Area (SIA). The credit must be claimed in equal installments over five years and applies to investments in depreciable tangible personal property in central administration offices, distribution, data processing, manufacturing, research and development or warehousing. A minimum investment of $500,000 is required. Jobs at the location of the investment must pay 110 percent of the county average weekly wage and include health insurance. SIAs are certain counties in the state that have both higher than statewide unemployment rates and lower than statewide per capital income. Each year by October 1, the Comptroller designates the counties that meet the criteria based on the most recent year’s data. Also, there are some partial county areas that are SIAs: federal urban enterprise areas and defense economic readjustment zones. Finally, all counties with population less than 50,000 are eligible as SIA for investment in agricultural processing industries.

• Goods in Transit – No state tax on goods in transit. The state's 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 if the property is 1) acquired in or transported from outside the state into the state to be forwarded outside of Texas, 2) detained for assembling, storing, manufacturing, processing, or fabricating purposes, and not located in the state for more than 175 days. Contact your local county to determine if they provide this exemption, www.naco.org/Template.cfm?Section=Find_a_County&Template=/cffiles/counties/state.cfm&statecode=tx

• Pollution Control – There is no state tax on property used for pollution control.

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Contact Us

The Coordinating and Development Corp.
5210 Hollywood Avenue
P. O. Box 37005-7005
Shreveport, LA 71133-7005
Phone: (318) 632-2022
Fax/TDD: (318) 632-2099
E-mail: info@cdconline.org

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