Texas Incentives and Workforce Development Guide
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For a list of Texas economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide.
- Texas Enterprise Fund:
- The largest “deal-closing” fund of its kind in the nation. The fund is a cash grant used as a financial incentive tool for projects that offer significant projected job creation and capital investment and where a single Texas site is competing with another viable out-of-state option. Projects that are considered for TEF support must demonstrate a project’s worthiness maximize the benefit to the state and realize a significant rate of return of the public dollars being used for economic development in Texas. Capital investment; job creation; wages generated; applicant’s financial strength; applicant’s business history; analysis of the relevant business sector; and federal and local government and private sector financial support of a project are all significant factors in approving the use of TEF.
- Texas Emerging Technology Fund:
- The $200 million Texas Emerging Technology Fund (TETF) is designed to help Texas create jobs and grow the economy over the long-term by expediting the development and commercialization of new technologies and attracting and creating jobs in technology fields that form the backbone of our economy. The program works through partnerships between the state, higher education institutions, and the private industry to focus greater attention on the research, development, and commercialization of emerging technology. TETF is dedicated to three areas:
- Regional Centers of Innovation and Commercialization. These centers are concentrated with applied research and development activities, are incubators (including specialized workforce training) for startup firms, and encourage expansion of existing companies resulting from commercializing their developments.
- Matching grant funds. Applied technology research and development projects that accelerate commercialization into production and have a demonstrated ability to receive or have received federal grants or non-state grants may apply for matching dollars from the Emerging Technology Fund. Grants such as Small Business Innovation Research grants, Small Business Technology Transfer grants, etc.
- Attracting research talent. The state will help Texas public universities attract highly renowned research teams from universities and institutions in other states.
- Skills Development Fund:
- An innovative program created to assist Texas public community and technical colleges finance customized job training for their local businesses. Grants are provided to help companies and labor unions form partnerships with local community colleges and technical schools to provide custom job training. Average training costs is $1,400 per trainee; grants for a single business may be limited to $500,000.
- Self-Sufficiency Fund:
- A job-training program that is specifically designed for individuals that receive Temporary Assistance for Needy Families (TANF). The program links the business community with local educational institutions and is administered by the Texas Workforce Commission. The goal of the Fund is to assist TANF recipients become independent of government financial assistance. The Fund makes grants available to eligible public colleges or to eligible private, nonprofit organizations to provide customized job training and training support services for specific employers.
- Texas Capital Fund Real Estate Development Program:
- Designed to provide financial resources to rural communities. Funds must be used for real estate development (acquisitions, construction and/or rehabilitation) to assist a business, which commits to create and/or retain permanent jobs, primarily for low- and moderate-income persons. This program encourages business development and expansions located in rural communities. The minimum award is $50,000 and the maximum is $750,000.
- Texas Industry Development Revolving Loan Program:
- Provides capital to Texas communities at favorable market rates. The program supports eligible tax exempt public purpose projects that stimulate economic development within the community. TID loans can be used for a variety of purposes, including the purchase of land, buildings, construction, machinery and equipment.
- Industrial Revenue Bonds:
- Tax-Exempt Industrial Revenue Bonds are designed to provide tax-exempt financing to finance land and depreciable property for eligible industrial or manufacturing projects. The maximum bond amount is $20 million.
- Texas Product/Business Funds:
- Provides financing to existing technology-focused companies that create products or do business within the state. Financing is done in the form of direct asset-based loans with a competitive variable interest rate tied to LIBOR. Loans can be amortized up to the life of the asset. Texas companies or out-of-state/international companies doing business in the state are eligible to apply. Funding preferences will be given to emerging technologies including semiconductors, nanotechnology, biotechnology and biomedicine, renewable energy, agriculture and aerospace.
- Moving Image Industry Incentive Program:
- Provides grants to promote industry growth in Texas and can be made to applicant production companies. For film and television projects, the incentive is available in the form of a cash production grant equal to between 5 and 29.25% of qualified in-state spending. Commercial and video game projects are eligible for 5% of eligible spending in the form of a cash production grant.
- State Sales & Use Tax Exemptions:
- Leased or purchased machinery, 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.
- 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 if at least 50% of the electricity or natural gas consumed by the business directly causes a physical change to a product.
- Texas provides 100% exemption on sales tax for computers, equipment, cooling systems, power infrastructure, electricity and fuel for Data Centers meeting the minimum thresholds of $200 million in capital investment, 20 new jobs, and an average salary at least 120% of the county average salary.
- Texas Enterprise Zone Program:
- An economic development tool for local communities to partner with the State of Texas to promote job creation and significant private investment that will assist economically distressed areas of the state. Approved projects are eligible to apply for state sales and use tax refunds on qualified expenditures. The refund can be an amount ranging from a minimum of $2,500 per job to a maximum of $7,500 depending on the size of the capital investment and the number of jobs created/retained.
- Texas Research & Development Tax Credit:
- In 2013, the 83th Texas Legislature enacted House Bill 800 creating a Research & Development tax credit effective Jan. 1, 2014. Providing companies a choice between a franchise tax credit and a sales tax exemption for materials, software, and equipment used for R&D purposes. Tax Code Chapter 171, subchapter M effectively establishes the qualifications, definitions and eligibility criteria for the credit.
- Property Tax Value Limitation:
- Encourages large-scale manufacturing, research and development, renewable energy, nuclear and integrated gasification combined cycle electric generation facilities capital investment projects in the State of Texas. It requires companies to invest a specified amount of money to qualify for a tax credit and an eight year limitation on the appraised value of a property for the maintenance and operations portion of the school district property tax. The local school district must elect to participate in order for the company to recognize this benefit.
- Renewable Energy Incentives:
- Tax Code Section 171.056 extends a franchise tax exemption to manufacturers, sellers, or installers of wind or solar energy devices. The state also permits a corporate deduction from the state’s franchise tax for renewable energy sources. Business owners may deduct the cost of the system from the company’s taxable capital or deduct 10% from the company’s income. Texas property tax code also permits a 100% exemption on the appraised value of solar, wind or biomass energy devices installed or constructed for the production and use of energy on-site.
For more information visit www.TexasWideOpenForBusiness.com