TX Incentives | Finance, Loans, IRB, Workforce Development

A comprehensive list of Texas financial aid, loans, grants, abatements, workforce development, exemptions, funds & capital investment opportunities.


https://businessfacilities.com/2016/03/tx-incentives-and-workforce-development-guide/
A comprehensive list of Texas financial aid, loans, grants, abatements, workforce development, exemptions, funds & capital investment opportunities.
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Texas Incentives and Workforce Development Guide

TX Incentives | Finance, Loans, IRB, Workforce Development

For a list of Texas economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide

 

FINANCING & GRANTS

Capital Access Program (CAP): is a partnership between the State of Texas and selected non-profit lenders to increase access to financing for small and medium-sized businesses and non-profits which face barriers to accessing capital or fall outside of guidelines of conventional lending. CAP facilitates loans which are underwritten by the participating non-profit lenders and supported by the state contributions to a loan loss reserve fund.

Events Trust Fund Programs: The Event Trust Funds program is comprised of three separate funds—the Events Trust Fund, Major Events Reimbursement Program, and Motor Sports Racing Trust Fund—targeted at attracting various types of events to the State of Texas. The Fund Programs can assist Texas communities with paying costs related to preparing for or conducting an event by depositing projected gains in various local and state taxes generated from the event. Funds are paid as a reimbursement after the event. A municipality, county, or non-profit local organizing committee endorsed by a Texas municipality or county which has been selected to host a qualified event, if the event location was selected through a highly competitive process by an independent site selection organization which considered other out-of-state locations.

The Governor’s University Research Initiative (GURI): The Governor’s University Research Initiative was enacted in 2015 with a goal to bring the best and brightest distinguished researchers in the world to Texas. GURI is a grant matching program that seeks to bolster both the standing of Texas public colleges and universities and economic development efforts statewide. The grant is paid on a cost-reimbursement basis.

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 $10 million towards a $20 million project.

Moving Image Industry Incentive Program: Provides grants to promote job growth in the Texas creative industries. Eligible projects include film, television, commercial, reality television, video game, XR, animation, and visual effects. The incentive is available in the form of a cash production grant from 5% to 22.5% of qualified in-state spending for eligible projects.

Spaceport Trust Fund: The Spaceport Trust Fund provides financial support for the development of infrastructure necessary or useful for establishing a spaceport in the State of Texas. Fund proceeds are available to any spaceport development corporation which has secured a viable business entity if that entity is capable of launching and landing a reusable launch vehicle or spacecraft and intends to locate its facilities at the development corporation’s planned spaceport in the state.

Texas Capital Fund Downtown Revitalization and Main Street Programs: Texas Capital Fund Downtown Revitalization and Main Street Programs address the objective of eliminating slum or blight conditions in the downtown area of the community by the following objectives. The assistance must be for public infrastructure improvements, which will aid in the elimination of a slum or blighted area. Eligible applicants are non-entitlement general purpose units of local government including cities and counties. Awards are $50,000 for the Downtown Revitalization Program and $350,000 for the Main Street Program.

Texas Capital Fund Infrastructure and Real Estate Programs: The Texas Capital Fund Infrastructure and Real Estate Development Programs are designed to provide financial resources to non-entitlement communities. Funds from the Infrastructure and Real Estate Programs can be utilized for public infrastructure or real estate development, respectively, to assist a business that commits to create and/or retain permanent jobs, primarily for low- and moderate-income persons. Awards range from $100,000 -$1,000,000.

Texas Enterprise Fund (TEF): The Texas Enterprise Fund awards “deal-closing” cash grants to companies considering a new project for which one Texas site is competing with other out-of-state sites. The fund serves as a financial incentive for those companies whose projects would contribute significant capital investment and new employment opportunities to the state’s economy. The Governor, Lieutenant Governor, and the Speaker of the House must unanimously agree to support the use of TEF for each specific project. Award amounts are calculated based on the average wage of new employees, taking into account the expected hiring timeline and number of jobs created, with per-employee award amounts subject to adjustment based on the company’s total proposed capital investment.

Texas Product Development & Small Business Incubator Fund (PDSBI): The Product Development and Small Business Incubator Fund offers long-term, asset-backed loans to product development companies and small business incubators/accelerators located in Texas. The loans finance the development and production of new or improved products or the stimulations of new or existing small businesses in Texas. PDSBI targets those businesses which may be unable to obtain full financing or financing on workable terms in traditional capital markets. The fund provides asset-based lending with flexible loan terms, competitive Loan-to-Value (LTV), and interest rates. Loan proceeds can be used for a broad range of capital and operating expenditures. To be eligible, applicants must have at least three years of operating history and have unencumbered assets available for collateral. Preference for funding is given to the state’s defined industry clusters including, but not limited to: nanotechnology, biotechnology, biomedicine, semiconductors.

 

TAX INCENTIVES

Business Relocation Tax Deduction & Exemption: Texas Tax Code Section 171.109(b) and  Texas Administrative Code Rule 3.584(c)(2) allows a qualified business relocating to Texas to take a deduction from its apportioned margin on its first franchise tax report due for certain relocation costs. Under Texas Tax Code Section 171.002 a taxable entity is not required to pay any franchise tax if the amount of the taxable entity’s total revenue from its entire business is less than or equal to $1 million or the amount determined per 12-month period on which margin is based. A business does not pay tax on its first $1 million of revenue when computing taxable margin. The entity is still responsible for filing a franchise tax report.

Media Production Development Zone Program (MPDZ): A sales and use tax exemption designed to encourage the further development of media production facilities. The incentive is a local and state sales tax exemption, up to 8.25%, for the construction, maintenance, expansion, improvement, or renovation of a media production facility over a two year period. Media production facilities include, but are not limited to: animation/CGI studios, post production facilities, sound stages, video game development studios, and production office space.

Renewable Energy Incentives: Texas Tax Code Section 171.056 exempts from franchise tax any qualifying Texas business that exclusively manufactures, sells or installs wind or solar energy devices. Additionally, Section 171.107 allows a qualifying business to deduct from its Texas-apportioned margin, 10% of amortized costs for wind and solar energy devices and systems it buys and installs in Texas to provide heating or cooling or to produce electrical or mechanical power to operate their businesses.

State Sales & Use Tax Exemptions: Texas Tax Code Section 151.318 and Texas Administrative Code Rule 3.300 exempts rented, leased or purchased machinery, equipment, replacement parts and accessories that have a useful life of more than one year or 12 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.

Section 151.359, Section 151.3595 and Rule 3.335 provide exemptions from sales tax on computers, certain equipment, cooling systems, electrical system and electricity for data centers meeting the minimum thresholds for a qualified data centers. Qualifications to for being an eligible data center are dependent upon factors including size, capital investment, and new jobs.

Texas Economic Development Act (Chapter 313): Tax Code Chapter 313 was created to encourage large-scale manufacturing, research and development and other large capital investment projects to locate in the State of Texas. Qualifying companies can receive a ten-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 and the state comptroller must determine the limitation is a determining factor in the applicant’s decision to invest capital and construct the project in the state in order for the company to recognize this benefit.

Texas Enterprise Zone Program: The Texas Enterprise Zone Program is a state sales and use tax refund program designed to encourage private investment and job creation in economically distressed areas of the state. Texas communities must nominate companies in their jurisdiction to receive an Enterprise Zone designation and thus be eligible to receive state sales and use tax refunds on qualified expenditures by submitting an application on the company’s behalf. The maximum allowed refund is based on the company’s planned capital investment and job creation and/or retention at the qualified business site. Companies can received from $25,000 for 10 jobs (at $2,500 per job) up to $3,750,000 for 500 jobs (at $7,500 per job).

Texas Research & Development Tax Credit: Texas Tax Code Chapter 171, subchapter M establishes the qualifications, definitions and eligibility criteria for taking the Texas Research and Development Tax Credit when reporting franchise tax. Section 151.3182 provides a sales tax exemption when buying materials, software and equipment directly used in qualified R&D purposes. The business may choose to take either the franchise tax credit or the sales tax exemption, but may not take both the franchise tax credit and sales tax exemption on the same qualified costs.

 

WORKFORCE DEVELOPMENT

Economic Development & Diversification In-State Tuition for Employees: The program allows employees—and those employees’ family members—of a qualified business considering a relocation or expansion of its operations in the State of Texas to pay in-state tuition rates at public institutions of higher education in the state without first establishing residency. A city, county or economic development group covering the Texas region in which the qualified business is considering locating, may apply on behalf of the business, so long as the business is still in the decision-making process to relocate or expand its operations at the applicable site.

Self-Sufficiency Fund: The Self Sufficiency Fund program assists adult recipients of Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP) benefits, individuals earning less than $37,000 annually with a dependent child (custodial or noncustodial), an individual at risk of becoming dependent on public assistance. Local community or technical colleges, or community-based organizations, or trade unions can apply for funding. The program targets spending $2,100 per trainee, and the training must lead to an acceptable industry-recognized certificate or credential.

Skills Development Fund: The Skills Development Fund is administered by the Texas Workforce Commission and provides local customized training opportunities for Texas’ businesses and workers to increase skill levels and wages. Businesses work with community and technical college partners to submit proposals, develop curricula, and conduct training to fill a specific need. The fund pays for the training, the college administers the grant, and business creates new jobs. Grants for a single business may be limited to $500,000, and can be applied toward tuition, curriculum development, instructor fees and training materials.

For more information, visit the Texas Governor’s Economic Development Office at https://gov.texas.gov/business/page/incentives

 

 

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