GRANTS

Texas Enterprise Fund (TEF): The fund is used as a “deal closing” incentive tool for projects that offer significant projected job creation and capital investment and where a single Texas site is competing with one or more viable out-of-state options. Award amounts are discretionary and determined based on a series of factors including the number of employees, average wage, industry, project location, etc. The level of capital investment plays a significant role in determining the maximum award for a project. Applications must also have support from the Texas community it is considering in the form of an incentive offer. New job creation must exceed 75full-time jobs in urban areas and 25 in rural areas. The total average wage must also exceed that of the county in which the project is located, and the company must demonstrate significant levels of planned capital investment.

The Skills Development Fund: Discretionary grants may be provided to public community and technical colleges that develop customized job training programs for businesses that want to train new workers or upgrade the skills of existing employees. Administered by the Texas Workforce Commission, this program offers an average reimbursement of $2,400 per trainee for training costs. The specific benefits can vary depending on the project’s scope and goals. Grants can reach up to a maximum of $500,000 and are available for a duration of up to 12 months.

Local Chapter 380 Grant or Loan: Local municipalities may provide grants or loans to eligible companies in return for the project meeting agreed upon performance benchmarks. The incentive is limited to capped percentage of local sales tax and are evaluated on case-by-case basis.

TAX EXEMPTIONS/ABATEMENTS

Jobs, Energy, Technology and Innovation Act (JETI): JETI is a discretionary incentive tool offering a property tax abatement for the school district portion of property taxes. The school district is frequently the largest portion of the property tax bill. Qualified businesses may be eligible for local real and/or tangible property abatement for a maximum term of 10years.

County Property Tax Abatement: Qualified businesses may be eligible for local real and/or tangible property abatement of the county portion of property taxes for a maximum term of 10 years.

Sales and Use Tax Exemptions: Available to taxpayers who manufacture, fabricate, or process tangible property for sale; manufacturing companies are also exempt from paying state sales/use tax on electricity and natural gas used in manufacturing, processing, or fabricating tangible personal property.

Medical & Biopharmaceutical Equipment & Inventory Property Tax: Starting in 2024, Texas now offers an ad valorem property tax exemption on finished goods inventory and production related property for medical and biomedical manufacturers.

Freeport/Goods in Transit Exemption: Property tax exemptions are available for various types of goods that are detained in Texas for 175 days or less, which can be waived for certain goods.  The goods must be in Texas only for a limited purpose such as assembly, storage, manufacturing, processing or fabricating. This exemption is available in select areas only.

Data Center Tax Exemption: Data Center projects involving at least 100,000 square feet that result in the creation of at least 20 qualifying jobs and a capital investment of at least $200 million over a 5-year period can qualify for a 100% exemption on sales and use tax. This only applies to the 6.25% state sales and use tax.

Subchapter T Franchise Tax Credit for Research and Development Activities: A person engaged in qualified research can claim 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. The amount of the credit is 6.25% of the difference between the qualified research expense incurred in Texas and the base period.  The total credit cannot exceed 50% of franchise tax liability.

LOW INTEREST FINANCING

Texas Small and Rural Community Success Fund: The program provides financing for qualified projects in Texas municipalities by allowing communities to leverage future sales tax revenues to support economic development projects that promote business expansion, recruitment, and exporting. The program is geared toward small, rural communities which may be unable to access traditional sources of infrastructure financing like municipal bonds. Loans range from $25,000 to $5 million and may be available for interim, long-term or gap financing.

Product Development & Small Business Incubator Fund (PDSBI): Recipients are small businesses with a new or improved product being developed, produced and and/or commercialized in Texas or a small business incubator. Preferred industries include semiconductors, nanotechnology, biotechnology, and biomedicine along with businesses having high potential of success, job creation and retention in the state. To be eligible for a loan, applicants must have at least 3 years of operating history. Loans can extend up to 20 years.

IN-STATE TUITION

Economic Development &Diversification in-State Tuition of Employees: 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.

SPECIAL ZONING

Texas Enterprise Zone Program: State sales and use tax refund tool designed to promote investment in economically distressed portions of the state. Communities must nominate companies to receive enterprise zone designation. Companies must meet investment and job creation thresholds to receive refunds. The maximum amount of refund per qualified job varies from $2,500 to $7,500 and the maximum amount of potential refund varies from $625,000 to $3,750,000. Award totals depend on capital investment and job creation.

Last updated: April 2026