Tenants of all shapes and sizes have to worry about their rent. Sometimes though, it seems like they worry too much about it. There are MANY things to consider when leasing space and although rent is a GIANT one to be concerned about, your business and its budget can be affected by lots of other things. We’ve covered how important space and sizing is with other posts, so now we wanted to make sure you have an understanding of how local governments (and occasionally federal ones) can make things easier on your business if you relocate to the right areas. Let’s get some incentives!
We’re going to cover some available programs, incentives, and abatements that are available in Texas. We operate primarily in Houston and Austin, so we’re further dialed into those as well. This doesn’t mean your city/state does not have programs available, in fact they very likely do! We recommend reaching out your local economic development partnership in your chosen municipality, they’re a great place to start!
Without further adieu, here’s a brief overview of available programs in Texas. There are many resources connected to incentives, abatement and even hiring programs that can be of use to tenants. These are exceptionally useful to industrial tenants, but office and retail occupiers can find value here as well.
Freeport Tax Exemption: Depending on your municipality. Items that are in the state for less than 175 days may be exempt from inventory property tax assessments. For more information on this program, visit the Texas Comptroller Office.
Job Tax Credits: Employers that hire targeted workers may be eligible for two federal tax credits and a state tax refund, with a maximum credit of $8,500 per employee (over two years). Targeted workers include AFDC/TANF, Food Stamp, and SSI recipients usually.
Additionally, credits exist for Work Opportunity Tax Credit, Welfare-to-Work Tax Credit, State of Texas Refund for Employers of AFDC/TANF*Clients * AFDC (Aid to Families with Dependent Children), and TANF (Temporary Assistance to Needy Families). There are also many great veteran programs for startups and new businesses, contact groups like Bunker Labs to learn more.
Check out the Texas Workforce Commission for more info.
State Sales & Use Tax Exemptions: Manufacturing Machinery and Equipment – certain leased or purchased machinery used or consumed in the manufacturing, processing, fabricating, or repairing of personal property for ultimate sale are exempt. Your friendly Texas State Comptroller can help with this.
Tax Abatement: Many counties in Texas have programs for this. Personal and/or property taxes can be abated for up to 10 years, depending on the number of jobs created and the amount of investment. Individual municipalities and EDP’s are usually responsible for negotiating these. There is a minimum investment associated and minimum number of new jobs created as well. Cities can additionally support training and hiring to the right employers as well.
Tuition Waivers: Companies that create jobs for which they must recruit employees from outside Texas may be eligible for a waiver of out-of-state tuition at state colleges and universities for those relocating employees and their family members. More information on these programs here.
Research & Development: Companies who are working in research and development activities can receive reductions in either applicable sales tax or franchise tax (not both typically). The R&D tax credit is administered through the Comptroller of Public Accounts in your state and has strict qualification guidelines.
Texas Enterprise Zone: The Texas Enterprise Zone Program is an economic development tool to establish a process that clearly identifies distressed areas and provides incentives by both local and state government to induce private investment in those areas by the provision of tax incentives and economic development program benefits for the creation and retention of high quality jobs. Under this program economic development is encouraged by allowing enterprise projects to be designated outside of an enterprise zone, with a higher threshold of hiring economically disadvantaged or enterprise zone residents.
The idea here is simple, when a zone is designated for enterprise the government will heavily incentivize hiring and development. These zones are more prominent than you think...check this out.
Texas Enterprise Fund: The $90 million fund can be used for a variety of economic development projects, including infrastructure development, community development, job training programs and business incentives. The Governor, Lieutenant Governor and Speaker must unanimously agree to support the use of the Texas Enterprise Fund for each specific project before funds can be awarded. Awards are made often, especially to businesses that are revitalizing, or hiring in areas of need.
Local community colleges can be a real resource for hiring and training as well, contact your local CC and Junior CC’s to learn more.
Here is a list of incentives and some examples...needless to say it’s worth your time to investigate! Almost $280M has been granted!
For financing and funding resources, we love People Fund and Lift Fund!
If you’re investing $1M in real estate, hiring, equipment or research and plan on hiring a minimum of ten jobs there are incentives and abatements for you!
We work closely with area SBDC’s, EDP’s, financing resources, educators and municipalities to help businesses succeed. If you have a question, contact us and we’ll get you connected to the right person. After all, at Tenavox we’re all about great connections :)