Texas is a top destination for businesses due to its favorable tax structure, large economy, skilled workforce, and wide range of economic development incentives.  The state offers various programs aimed at attracting companies across industries such as energy, manufacturing, technology, and logistics.  Below are some of the key incentives available for businesses in Texas.

Texas Enterprise Fund (TEF)

Overview

The TEF is one of the state’s most competitive incentives, offering grants to businesses that are planning to relocate or expand in Texas.  The fund is designed to provide financial assistance to companies that will create jobs and stimulate investment in the state.

Eligibility

• The business must be planning a new facility or expansion in Texas that creates a significant number of jobs.

• The business must invest a substantial amount in capital improvements, infrastructure, or equipment.

• The project must be in a targeted industry, including technology, manufacturing, and energy.

Incentive Value

• Grants can range from $1 million to $50 million, depending on the size of the project, the number of jobs created, and the capital investment.

• The amount of the grant is negotiated based on the projected economic impact.

Application Process

Businesses must apply through the Texas Governor’s Office of Economic Development and Tourism (GOEDT), providing detailed plans for job creation, capital investment, and economic impact.

Texas Quality Jobs Program

Overview

The Texas Quality Jobs Program incentivizes businesses to create high-quality jobs in the state.  This program provides cash rebates to companies that create jobs with competitive wages and benefits.

Eligibility

• The business must create at least 25 new full-time jobs.

• The jobs must meet certain wage and benefits standards, which are typically above the county’s average wage.

• The business must be located in a qualified area, and the jobs must be created within 36 months.

Incentive Value

• Cash rebates can range from $2,500 to $9,000 per job, depending on the wage level and the location of the project.

• The total rebate amount depends on the number of jobs created and the project’s economic impact.

Application Process

Businesses must apply through the Texas Comptroller of Public Accounts (CPA), submitting information on job creation, wage rates, and business operations.

Texas State Sales and Use Tax Exemptions for Manufacturing

Overview

Texas offers a sales and use tax exemption for machinery and equipment used in manufacturing, research and development, and certain other business operations.  This program is designed to lower the upfront costs for businesses investing in manufacturing infrastructure.

Eligibility

• The business must be engaged in manufacturing, research and development, or other qualifying activities within Texas.

• The machinery and equipment must be used directly in production or research operations.

Incentive Value

• The program provides a full exemption from sales and use taxes for qualifying purchases of machinery, equipment, and materials used in production.

• Exemptions can apply to up to 100% of the sales tax.

Application Process

Businesses must apply to the CPA, providing documentation of purchases and their intended use in manufacturing operations.

Texas Research and Development (R&D) Tax Credit

Overview

The Texas R&D Tax Credit is designed to encourage innovation and technological advancement by providing tax credits to businesses that engage in research and development activities in the state.

Eligibility

• The business must be conducting R&D activities in Texas, including product development, process improvement, and software development.

• The R&D activities must lead to technological advancements or innovation.

Incentive Value

• The credit can be up to 5% of eligible R&D expenditures in Texas.

• The program is uncapped, so businesses can claim a credit based on the size of their investment in R&D.

Application Process

Businesses must apply through CPA, providing documentation of R&D activities and eligible expenditures.

Texas Skills Development Fund

Overview

The Texas Skills Development Fund is a workforce development program that provides funding to businesses for training and skill development for employees. This program is designed to help businesses enhance their workforce's capabilities and meet industry-specific needs.

Eligibility

• The business must be located in Texas and plan to train employees in specific job skills.

• The business must demonstrate that the training program is necessary to improve productivity or safety.

Incentive Value

• The fund provides up to $2 million in grants per project, depending on the number of workers trained and the scope of the program.

• The training must lead to higher skill levels or career advancement for employees.

Application Process

Businesses must apply through the Texas Workforce Commission, submitting a detailed training plan, employee data, and projected training costs.

Texas Freeport Exemption

Overview

The Texas Freeport Exemption provides an exemption from property taxes on goods that are stored in Texas for export.  This incentive is particularly beneficial to businesses involved in distribution, warehousing, and logistics.

Eligibility

• The business must be engaged in the storage or distribution of goods that are intended for export outside of Texas.

• The goods must be stored in Texas for no more than 175 days.

Incentive Value

• Businesses can receive a full exemption from property taxes on qualifying goods stored in Texas.

• The exemption applies to inventory, machinery, and equipment used in the storage or transportation of goods.

Application Process

Businesses must apply to the local county appraisal district, providing details of the goods stored and their intended export destination.

Texas Foreign Trade Zone (FTZ)

Overview

The Texas FTZ program offers businesses the ability to defer or reduce customs duties on imported goods that are used in manufacturing, assembly, or distribution processes.  This program is designed to support businesses involved in international trade.

Eligibility

• The business must operate in a designated FTZ in Texas.

• The business must use imported goods in manufacturing, assembly, or distribution activities.

Incentive Value

• Businesses can defer customs duties on imported goods and may qualify for reductions in customs duties and other fees.

• The program provides flexibility for businesses to manage supply chains more effectively.

Application Process

Businesses must apply through the U.S. Foreign-Trade Zones Board and the Texas FTZ administrator, submitting information about their operations and the goods involved.

Texas Major Economic Development Program (EDP)

Overview

The Texas Major EDP provides incentives to businesses that undertake large-scale capital investments and create high-quality jobs in Texas.  This program is designed to support projects with significant economic impact on the state.

Eligibility

• The business must make a substantial capital investment and create a significant number of jobs in Texas.

• The business must be in a targeted industry, such as advanced manufacturing, energy, or high-tech industries.

Incentive Value

• The program offers up to $10 million in grants or incentives, based on the size and impact of the project.

• Businesses can also receive customized incentives, including tax rebates and property tax abatements.

Application Process

Businesses must apply to GOEDT, providing project details, financial projections, and job creation estimates.