Houston Tax Incentives List

Select an Incentive for Full Details

Texas Enterprise Fund

The TEF, which was established in 2003, awards cash incentives to business initiatives that guarantee a sizable quantity of capital investment and high-income job creation.

The fund, which is frequently referred to as a “deal closer,” only gives out funds when “a single Texas location is competing with another feasible out-of-state choice.”

The main objective is to make sure that Texas does not lose its competitive edge if another state offers its incentive program.

Link: https://gov.texas.gov/business/page/texas-enterprise-fund

Skills Development Fund

To raise the skill levels and earnings of the Texas workforce, the Skills Development Fund offers firms in Texas and their employees specialized training options.

Grant money can be used by training organizations for curriculum creation, training materials, teacher certifications, and new or improved training equipment.

Recruit Texas and the Skills Development Fund are the two separate programs that are associated with it.

Link: https://www.twc.texas.gov/partners/skills-development-fund

Economic Development & Diversification In-State Tuition for Employees

This program enables employees—and the families of those employees of a qualified company thinking about shifting or moving its operations in the State of Texas to pay in-state tuition fees at state-run public universities without first proving residence.

As long as the qualified business is still considering whether to relocate to or expand its operations at the relevant site, a city, county, or economic development organization serving the Texas region in which the qualified business is considering locating may apply on the company’s behalf.

Link: https://gov.texas.gov/business/page/economic-development-diversification-in-state-tuition-for-employees

Manufacturing Exemption

State sales tax and use tax exemptions could be given to the taxpayers who create, produce, or process their personal property for sale.

Tangible private property that is used as an element of a good created for sale in Texas is free from sales and use tax, as are taxable services provided to a good manufactured for sale to increase its marketability.

State Sales Tax Exemption for Qualified Data Centers

In Texas, a “data center” is defined as a building with at least 100,000 square feet that has been built, or will be built, specifically to house servers and other equipment for processing, storing, or disseminating data.

Single-occupant data centers that satisfy particular standards for capital expenditure and employment development may be recognized as “qualifying data centers” by the Comptroller’s office.

The 6.25 percent state sales and use tax is temporarily waived for certain things that are required and crucial for a certified data center to function.

On purchases of these qualified items, local sales taxes are required.

Sales Tax Exemption or Franchise Tax Credit for Qualified Research

A Texas law that aims to promote R&D-related economic development in Texas took effect in 2014.

A participant who plays their role in qualifying research may be eligible for a franchise tax credit that is based on the qualified research expenses of a sales and use tax exemption on the lease, storage, rental, purchase, or the for the use of depreciable tangible personal property that the qualified research use directly.

For the same period, one cannot be eligible for sales tax exemption or franchise tax credit.

The decision to take advantage of the franchise tax credit or the sales tax exemption is not final and can be altered.

Property Tax Abatement Act

A local agreement that takes place in between the taxing entity and a taxpayer, exempting each or a portion of the growth in the real property’s value and/or tangible personal property from taxation for a while not to exceed 10 years is known as tax abatement.

By providing property tax exemptions or reductions, tax abatements are a tool for economic development that cities, counties, and special districts can use to entice new enterprises and promote the retention and expansion of current businesses.

Abatement contracts cannot be made by school districts.

Chapter 380/381 Economic Development Agreements

County Agreements

The Local Government Code’s Chapter 381 permits counties to offer incentives to developers to encourage them to build within their borders.

To foster state or local economic growth and to stimulate, encourage, and develop business locations and commercial activity in the county, a county may administer and design a program to give loans and grants of public money.

Municipality Agreements

Municipalities are permitted to offer incentives to encourage economic growth, such as commercial and retail developments, under Chapter 380 of the Local Government Code.

In particular, it calls for providing loans and grants for city finances or services at little or no cost to support local and state economic growth and to spur trade and business activity.

Foreign Trade Zone

A corporation engaged in international trade may find a Foreign Trade Zone (FTZ) to be a highly useful resource.

It is a specified area where both domestic and imported goods are typically regarded by the American government as existing outside of the U.S. Customs territory.

A formal customs entry, import quotas, and the majority of other import restrictions are not required to import goods into an FTZ. Before the item enters U.S. trade, duties and excise taxes are not assessed.

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