Texas Tax Incentives For Texas Businesses

Texas provides a range of incentive programs to provide access to capital for firms wishing to grow, as well as for those already operating there.

State and local governments and economic development agencies collaborate to create appealing incentive packages for qualifying businesses throughout Texas. If you’re unsure about what incentives are available to your company, speak to a qualified CPA.

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Texas Enterprise Fund

The nation’s largest “deal-closing” fund of its kind is the Texas Enterprise Fund (TEF).

When a single Texas site is competing with another potential out-of-state option for a project that offers significant projected job creation and capital investment, the fund is employed as a last-resort incentive mechanism.

A project must show a considerable return on the state’s investment as well as strong local support to qualify for TEF support.

Numerous aspects of each project will be taken into account during the review process, such as the likelihood of generating employment and wages, the amount of capital invested, the applicant’s financial stability, the history of their businesses, an examination of the relevant industry, and financial support from both the public and private sectors.

City, county, and/or school district engagement in the project is required, primarily in the form of local economic incentive packages.

The use of the Texas Enterprise Fund for each particular project must first receive the support of the Governor, Lieutenant Governor, and Speaker to be funded.

Events Trust Fund

The Events Trust Fund scheme allocates local and state gains from taxes produced over a predetermined period, including sales and use, motor rental, lodging, and alcoholic beverage taxes.

Sports events are not the only ones that qualify, but the location must have been chosen through a fiercely competitive selection procedure.

The Funds can help Texas towns by depositing predicted gains in a variety of local and state taxes produced by the event in a specific trust fund for that event to pay for approved expenses

Trusts are established specifically for an event, to which both the state and the applicant must contribute, and assist in covering the eligible costs related to the event.

The state’s contribution cannot be greater than the anticipated rise in state sales and use taxes as well as increases in the hotel, alcoholic beverage, and motor rental taxes that are anticipated to come from the qualifying event within the designated event period or “economic impact window.”

Product Development and Small Business Incubator Fund

The Texas-based Product Development and Small Business Incubator Fund (PDSBI) provides long-term, asset-backed loans to small business incubators and accelerators.

The loans fund the creation and manufacturing of fresh or enhanced goods as well as the growth of new or existing small enterprises in Texas.

The initiative is aimed at companies who would find it difficult to access complete financing or financing on reasonable conditions in the conventional capital markets.

Texas Enterprise Zone Program

The Texas Enterprise Zone Program is a program for economic development that enables local governments to work in tandem with the State of Texas to encourage the creation of jobs and sizable private investments that will support the state’s economically struggling regions.

A community with a population under 250,000 may have up to six entrepreneurial projects under the statewide limit of 105 projects per biennium.

A community with a population of at least 250,000 people is allowed up to nine business initiatives.

As part of the audit process, receipts for purchases of building materials, machinery, and equipment as well as payroll data must be kept.

Skills Development Fund

The Skills Development Fund is the top job training program in Texas, offering regionally tailored training options for Texas companies and employees to raise the skill levels and salaries of the workforce in Texas.

The Texas Workforce Commission oversees the Fund, which was created by the Legislature in 1995. Companies and worker associations can get grants to help them cooperate with local community colleges and technical schools to offer specialized job training.

The average cost of training is $1,800 per trainee, however, benefits can change based on the proposal.

Collaboration between employers, public community colleges, workforce development boards, and economic development partners is the key to success.

Economic Development and Diversification In-State Tuition for Employees

Economic Development and Diversification In-State Tuition for Employees is a program that enables employees—and those employees’ families—of a qualified company thinking about moving or expanding its operations in the State of Texas to pay in-state tuition rates at state-run public universities without first proving residence.
These are the conditions for being eligible:

  • You should be a nonresident person, (including a permanent resident of the United States, a citizen, an individual who is eligible to be a permanent resident of the United States, and an eligible nonimmigrant) whose family went through a transfer to Texas by a company that was established by the Economic Development and Diversification Program, and the establishment of such company should at least have met 5 years before the relevant enrollment date.
  • As soon as your spouse and children move to Texas, they shall pay resident tuition, if you are providing the Office of Financial Aid with a letter showing your intentions to establish Texas as your state of residence.

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