State Incentives

TXEDT

Grants & Rebates

The Texas Enterprise Fund is a cash grant used as a financial incentive tool for projects that offer significant projected job creation and capital investment.  In Granbury and Hood County, companies must create a minimum of 25 jobs and awards currently range from $1,000 to $10,000 per job.  Among other qualifications, a company’s average wage must be greater than that of the arrival county.   Hood County’s current average weekly wage is $839.00 per week or $43,628 annually.  Funding is provided over a ten-year period. More information can be found here:  https://gov.texas.gov/business/page/texas-enterprise-fund.

The Texas Rural Business Fund (TxRBF) is a pilot program that provides funding to rural communities and counties to incentivize job creation and industry development in rural Texas. Applicants must demonstrate how the business recruitment or expansion significantly impacts the community and region.  Projects must support an established business in the agricultural & food manufacturing business, biotechnology & life sciences, energy, information technology, manufacturing, supply chain and logistics industries that will create skilled jobs and have the potential to spur further economic development.   Eligible applicants are rural cities located in counties with less than 200,000 population. TxRBF funds must be used for public infrastructure improvements which includes road, rail, water, sewer, electric, and telecommunications as well as for engineering costs related to the public infrastructure improvements. TxRBF funds may not be used for administrative costs.   More information can be found here.

Texas Enterprise Zone Program:  As a community under 250,000 in population, Granbury and Hood County can have up to six enterprise projects each. Upon a community designating a business as an enterprise project, and upon that project’s designation being approved by the state, the business would be eligible for the following incentives: a refund for all state sales and use taxes paid and used at the qualified business site. The total amount of any refund will continue to be predicated on investment amount and number of jobs created/retained.  The refund for each designation can be an amount ranging from a minimum of $2,500 per job to a maximum of $7,500 per job as follows: 1. Half Enterprise Project: If the project investment amount is greater than $40,000 and equal to $5 million or more, then refund amount is $2,500 per job up to a maximum of 250 jobs created/retained. Maximum refund available is $625,000; 2. Enterprise Project: If project investment amount is equal to or greater than $5 million or more, then the refund amount is $2,500 per job up to a maximum of 500 jobs created/retained; 3. Double Jumbo Enterprise Project: If the project investment amount is equal to or greater than $150 million and less than $250 million, then refund amount is $5,000 per job up to a maximum of 500 jobs created; 4.Triple Jumbo Enterprise Project: If the project investment amount is equal to or greater than $250 million, then refund amount is $7,500 per job up to a minimum of 500 jobs created. Maximum refund available is $3.75 million.  Receipts for purchases of building materials and machinery and equipment and payroll information are required to be retained as part of the audit process. (Note: All contracts should separate the costs for building materials and/or equipment from the costs of labor and services in order to be eligible.)  The refund for sales and use tax must be for all eligible items for use at the qualified business site.  More information can be found here:  https://gov.texas.gov/business/page/texas-enterprise-zone-program.  

The Texas Moving Image Industry Incentive Program is administered by the Texas Film Commission within the Texas Economic Development and Tourism Office. The program is designed to provide grants to qualified applicant production companies to promote industry and workforce growth in film, television, video game and animation in Texas.  The incentive is available in the form of a cash grant from 5% to 22.5% of qualified in-state spending for eligible projects. Commercial and reality television projects are eligible for a cash production grant from 5% to 12.5% of qualified in-state spending. Both live action and animated projects are eligible. Grants are available upon project completion and submission of proof of eligible spending to the Texas Film Commission. There are no maximum grant amounts.  Specific eligibility qualifications for projects including investment thresholds, employment requirements, and content are available through the Texas Film Commission at http://governor.state.tx.us/film/incentives/miiip/.

The Governor’s University Research Initiative grant program (GURI) was enacted in 2015 by the 84th Legislature with a goal to bring the best and brightest researchers in the world to Texas colleges and universities. Through the GURI program, Texas welcomes transformative researchers who will in turn serve as economic catalysts to the Texas economy for years to come. GURI is a matching grant program to assist eligible Texas institutions of higher education in recruiting distinguished researchers, such as Nobel Laureates and members of national honorific societies, from around the world. The program is codified in Chapter 62 of the Texas Education Code, Subchapter H and the program’s administrative rules may be found in Title 10, Part 5, Chapter 190 of the Texas Administrative Code.   More information can be found here: https://gov.texas.gov/business/page/guri.

The Cancer Prevention and Research General Obligation Bonds allows the State of Texas to establish the Cancer Prevention and Research Institute of Texas (the Institute) and allows the Institute to issue $3 billion in general obligation bonds over ten years to fund grants for cancer research and prevention. The Institute may invest the grants strategically in cancer research, clinical trials, and laboratory facility construction in Texas. The Institute will continue to implement the Texas Cancer Plan. Visit www.cprit.state.tx.us, or contact the office at (512) 463-3190.

Tax Incentives

Texas Franchise Tax Exemption & Deduction For Business Relocation: This program provides authorization for a company to deduct moving expenses from their apportioned margin while calculating their franchise liability. Companies must relocate their principle place of business from outside the state into Texas to obtain the deduction. A taxable entity may deduct relocation costs incurred in relocating the taxable entity’s main office or other principal place of business to this state from another state if the business meets the criteria in Texas Tax Code Section 171.109(b). The taxable entity must take the deduction on the entity’s first annual report described by Rule 3.584(c) (1)(C)(i). The deduction may not reduce apportioned margin below zero, and no carryover of unused deduction is allowed. For more information, visit http://www.window.state.tx.us/taxinfo/taxforms/05-906.pdf. The bill also makes permanent an exemption for businesses that gross less than $1 million in revenue while providing a $1 million deduction for businesses once they pass the gross receipts' revenue threshold. The bill also amends the margin calculation accordingly for equity.

Texas Sales and Use Tax Exemption on Manufacturing Machinery & Equipment: Leased or purchased machinery, equipment, replacement parts and accessories 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 businesses are exempt from paying state sales and use tax on labor for constructing new facilities. Texas businesses are exempt from paying state sales and use tax on the purchase of machinery exclusively used in processing, packing or marketing agricultural products by the original producer at a location operated by the original producer.   More information can be found here:  https://comptroller.texas.gov/taxes/publications/94-124.php.

Texas Sales and Use Tax Exemption on Natural Gas & Electricity: Texas companies are exempt from paying state and local sales and use tax on electricity and natural gas used in manufacturing, processing or fabricating tangible personal property. The company must complete a “predominant use study” that shows that at least 50% of the electricity or natural gas consumed by the business directly causes a physical change to a product.  Find more information here

Texas Sales and Use Tax Data Center Exemption: 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. For more information, visit https://comptroller.texas.gov/taxes/data-centers/.

Research & Development Tax Incentive provides persons engaged in qualified research with either a sales and use tax exemption on the purchase, lease, rental, storage or use of depreciable tangible personal property directly used in qualified research, or a franchise tax credit based on qualified research expenses.   A person cannot claim both the sales tax exemption and the franchise tax credit for the same period. The election to claim the sales tax exemption or take the franchise tax credit is not permanent and can be changed.  https://comptroller.texas.gov/taxes/qualified-research/.

The Pollution Control Equipment Incentive provides an exemption from property taxation for pollution control. The intent is ensuring that compliance with environmental mandates, through capital investments, did not result in an increase in a facility's property taxes.  To be eligible, the property must have been purchased, acquired, constructed, or installed after January 1, 1994, to meet or exceed federal, state, or local environmental laws, rules, or regulations.  The determination is provided to the local appraisal district which must accept the decision of TCEQ (Texas Commission on Environmental Quality) and grant an exemption for the pollution control property.  Find more information here.

Texas Renewal Energy Incentives allow a 100% tax exemption on the appraised value of solar, wind, or biomass energy devices installed for on-site use.  Find more information here.

Texas Sales Tax Exemption for Media Productions & Facilities:  Under Texas law, a producer or production company may claim a sales or use tax exemption on items or services necessary to and used or consumed directly during the production of a project intended for commercial distribution such as a feature film, commercial, television project or recording of live performances. Sales and use tax exemptions are not eligible for productions not sold to the public, such as wedding videos and videos shown on social media or video games.  More information can be found here: https://gov.texas.gov/film/page/sales_tax_exemptions.

The Media Production Development Zone Act (MPDZ), established by the 81st Texas Legislature in 2009 and administered by the Texas Film Commission, is designed to encourage the further development of permanent moving image production sites to help strengthen Texas’ economy. MPDZ allows for a sales and use tax exemption for the construction, maintenance, expansion, improvement or renovation of a media production facility at a qualified media production location 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. Further program details and application information can be found at https://gov.texas.gov/film/page/mpdz.

TWC

Workforce & Training Incentives 

The Texas Skills Development Fund provides local customized training opportunities through local community colleges or approved providers for Texas businesses and workers to increase the skill levels of the Texas workforce.  Training providers can use grant funds for curriculum development, training materials, instructor certifications and training equipment and is typically provided for new worker training and incumbent worker training.   Funding is $1,800 per job.  Find more information here

The Skills for Small Business Program, through the Texas Workforce Commission (TWC), allows small businesses to apply to TWC for training offered by their local community or technical college, or the Texas Engineering Extension Service (TEEX). TWC processes the applications and works with the college to fund the specific courses selected by the business for their employees.  The Skills for Small Business Program program supports businesses with fewer than 100 employees, and emphasizes training for new workers and incumbent workers. It also may help upgrade the skills of incumbent workers. Skills for Small Business emphasizes training new employees who have been hired by the business up to twelve months prior to the date that TWC receives an application.  The program pays up to $1,800 for the training of each new employee and $900 for existing employees during a 12-month period.  Funding for training is for full-time, permanent employees.  All training must be provided by the grant recipients, which includes a public community or technical college or TEEX. No third-party vendor training is allowed.  Training must be selected from active course catalogs/schedules — credit, continuing education, online, or other available unpublished courses.  Grants provide funds for tuition and fees, which are dispersed directly to the college. 

The Self-Sufficiency Fund  is 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. A joint application from the employer and the eligible public college and/or eligible private, nonprofit organization is required to be submitted to the Local Workforce Development Board for review and comment prior to approval. For more information, please contact the Texas Workforce Commission at (512) 463-1986, or visit https://twc.texas.gov/programs/self-sufficiency-fund-program-overview.

The Economic Development & Diversification In-State Tuition for Employees may be offered to qualified businesses that are in the decision-making process to relocate or expand their operations into Texas. The incentive is targeted to assist high impact projects that are linked to the strategic economic clusters identified in the state. The incentive allows employees and family members of the qualified businesses to pay in-state tuition fees if the individual files with a Texas institution of higher education. Without this incentive designation, a student must reside in Texas for a 12-month period to be entitled to pay the tuition fees of a Texas resident.   http://www.collegeforalltexans.com/apps/financialaid/tofa2.cfm?ID=567.

Financing 

Texas Industrial Revenue Bond Program (IRB): Industrial Revenue Bonds (IRBs) provide a source of tax-exempt or taxable bond finance for projects involving significant private activity that promote new and existing businesses, encourage employment, and expand the tax base of a community. IRBs are issued by Industrial Development Corporations sponsored by a government unit, but their proceeds are passed on to private businesses, which are generally responsible for debt service payment. 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, and can include certain capital and administrative costs.   The maximum capital expenditure amount increased to $20 million. These issues must receive a reservation under the State’s volume limitation (“volume cap”) managed by the Texas Bond Review Board. Initial reservations of volume cap are allocated by lottery in November prior to the program year; any remaining volume cap is allocated to applicants on a “first come, first served” basis. For more information, contact the Texas Bond Review Board at (512) 463-1741, or visit https://gov.texas.gov/business/page/industrial-revenue-bonds.

Capital for Texas (C4T) Small Business Loan Program:  The Texas Department of Agriculture (TDA) is working with Community Development Financial Institutions (CDFI), to lend and manage funds allocated to TDA for its Capital for Texas Program (C4T).  C4T is designed to increase rural communities small businesses’ access to capital and enable private entrepreneurs to make market-driven decisions to grow jobs, assist their growth potential and employment capabilities through partnering community development financial institutions. This program supports TDA’s goals of empowering rural communities and cultivating winning strategies for rural Texas, by providing finance options to small businesses and manufacturers that are creditworthy, but are not getting the loans they need to expand and create jobs. TDA anticipates the actual range of loans for the C4T program will be in the range of $5,000 to $350,000, with an average investment less than $100,000.  Community Development Financial Institutions (CDFIs).  TDA is working with the following CDFI's to administer the funds of this program. An example of a CDFI:  More information can be found here:  www.peoplefund.org.

The 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. The Program facilitates loans which are underwritten by the participating non-profit lenders and supported by the state contributions to a loan loss reserve fund.  Small and medium-sized businesses and non-profit organizations which are domiciled in the State of Texas or have at least 51% of their employees located in the state and which are seeking financing for projects, activities or enterprises in the state that foster economic development.  Loans whose proceeds may be used for working capital or the purchase, construction or lease of capital assets, to include buildings and equipment. The state supports program loans made by each participating lender through contributions to a loan loss reserve account.  Eligible businesses must have no more than 499 employees to qualify.   Loans may not be used to construct or purchase residential housing to make simple real estate investments, excluding real estate occupied by the applicant’s business.  Find more information here. 

Texas Product/Small Business Incubator Fund provides asset-based financing to existing technology-focused companies that create products or do business in Texas.  Financing is done in the form of direct asset-based loans with competitive lending rates.   Any business, locating or expanding in Texas, is eligible to apply.  The Office of the Governor, Texas Economic Development Bank administers the Texas Product/Business Fund at the direction of the Governor’s appointed nine-member board.  Preference for funding is given to the state’s defined industry clusters including, but not limited to aerospace, agriculture, biomedicine, biotechnology, nanotechnology, renewable energy, and semiconductors.  Find more information here.

Other Assistance 

Permit and Business License Fees:  Texas does not require a general “business” license; however, there are a number of regulatory agencies that have licensing and permitting requirements based on type of service or products associated with some types of business. Air, water and/or waste permits can be obtained through Texas Commission on Environmental Quality (TCEQ). The Office of the Governor has established relationships with TCEQ to assist with permitting.