Incentives
Businesses in the Lake Houston region have the opportunity to develop and expand their services with resources at their disposal. With a desire to make the area the most favorable place in terms of cost and investment, there are a number of state and local incentives available. Discover why Lake Houston is the prime location for companies of all sizes, whether it be a startup business or national headquarters.
Local Incentives
There are a number of local incentive programs available to businesses interested in relocating to the Lake Houston area.
Property Tax Abatement – Chapter 312
A variety of cities and counties in the Houston region offer tax abatement agreements that exempt part of the increased value in real or personal property from taxation for a period not to exceed 10 years.
Texas Economic Development Act – Chapter 313
An appraised value limitation agreement in which a taxpayer agrees to build or install property and create jobs in exchange for a limitation on the taxable property value for school district maintenance and operations tax (M&O) purposes and a tax credit. The minimum limitation value varies by school district.
Chapters 380 & 381
These discretionary incentives typically take the form of property tax abatements, loans or grants, commitments for infrastructure, or payments of portions of the sales tax generated by the project. Negotiations on these incentives between the local jurisdiction and the developer occur on a case by case basis. The Chapter 380 is targeted specifically for use by cities while Chapter 381 is specifically for use by county governments. These agreements can be used in tandem for the same project.
Foreign Trade Zone Foreign
Trade Zones (FTZ’s) allow companies dealing in foreign trade to delay payment of U.S. Custom’s import duties until their goods and merchandise actually enter U.S. commerce. Goods can be brought into Foreign Trade Zones (FTZ) without formal U.S. Customs entry or without incurring U.S. Customs duties or excise taxes unless and until they are imported into the United States. Ad valorem taxes on inventory may be exempt in some zones, upon approval of the FTZ sponsor.
Downtown Humble Improvement Program
The City of Humble desires to enhance and promote its downtown area through this matching grant program designed to visually improve and beautify the exterior appearances of property and buildings within a defined geographical area. The city will match up to $10,000 for renovations to downtown residences and businesses.
State Incentives
The state of Texas offers a number of incentives for businesses desiring to relocate or expand their infrastructures within the state. Take a look at the most common advantages and offered by the Office of the Governor, Economic Development and Tourism.
Texas Enterprise Fund
The Texas Enterprise Fund (TEF), one of the nation’s largest deal-closing funds, is a performance-based cash grant for qualifying projects that offer significant projected job creation and capital investment where a single Texas site is competing with another viable out-of-state option (cash incentive).
The Texas Enterprise Zone Program
The Texas Enterprise Zone Program (EZP) is a potential Sales and Use tax refund based on new and retained jobs associated with the qualified business site during the designation period. Communities may nominate projects for an EZP designation, and projects are awarded by the Governor’s Office during quarterly competitive rounds.
Skills Development Fund
Skills Development Fund (SDF) grants are provided to help companies form partnerships with local state community colleges and technical schools to provide custom job training for new or existing employees. Average training cost is $1,800 per trainee and is administered by the Texas Workforce Commission. Businesses with fewer than 100 employees can also apply for this program through the Skills for Small Business program (workforce incentive).
Texas Capital Fund
The Texas Capital Fund administered by the Department of Agriculture is an economic development tool designed to provide financial resources to non-entitlement communities that can be utilized for public infrastructure or real estate development needed to assist a business that commits to create and/or retain permanent jobs (cash incentive).
Diversification Waiver
This incentive allows employees and family members of qualified businesses who have not yet located in Texas to pay in-state tuition fees if the individual files with a Texas institution of higher education.
Permit Assistance
TCEQ and the Office of the Governor have established a relationship to assist companies, which may experience unwarranted delays in their environmental permitting process for projects that could affect job creation or have a high economic impact.
Manufacturing Sales Tax Exemption
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.
Natural Gas & Electricity Sales & Use Tax Exemption
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.
State Sales Tax Exemption for Qualified Data Centers
Texas provides 100 percent 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 a salary at least 120 percent of the county average salary.
Business Relocation Incentive
A taxable entity may deduct relocation costs incurred from relocating a main office or other principal place of business to the State of Texas from another state or country if the taxable entity did not do business in the State of Texas before relocating.
Research and Development Tax Credit
The Research & Development tax credit provides qualified companies with an option for tax savings based on a purchase of equipment or software, R&D expenditures, or contracts with higher education institutions performing research.
Self-Sufficiency Fund
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.
Talent Recruitment and Employer Services
Workforce Solutions offers recruiting, training, and retraining, outplacement services, assistance recruiting and retaining qualified employees, and valuable information on employment law and labor market trends and statistics.
Texas Manufacturing Assistance Center (TMAC)
Designed to help Texas small manufacturing companies remain competitive in the ever-changing global marketplace. The TMAC center provides technical assistance at a discounted rate for process improvements, environmental regulations upgrades, changes in the technology and the marketplace.
On-the-Job Training
On-the-Job Training (OJT) offers participants an opportunity to earn as they learn, while employers benefit from a partial wage reimbursement during the training period. OJT focuses on jobs that involve new technologies, production, service or additional skills for full-time positions (30 hours per week is considered full-time) paying at least $12.00 per hour or more.