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BUSINESS GROWS HERE

The City of Boerne and Kendall County are focused on providing new resources and incentives to grow the economy, revitalize targeted areas of the community and promote strong, balanced growth.

SALES & USE TAX RATE

Texas
Boerne
Kendall County
6.250%
1.5%
.5%

Boerne Total Tax Rate
8.250%

See below for a highlight of the state, county and city assistance available for both existing and new businesses, and let the BKCEDC Team prepare an individualized informational package on taxes and incentives specific to your needs and potential location in Boerne/Kendall County. Call us for a consultation. We can help you explore the many advantages Boerne/Kendall County has to offer.

Local Incentives } • Tax Abatement Application• City of Boerne Economic Incentives Policy

State of Texas Incentives

Below is a list of Incentives and Programs that, if eligible, the State of Texas can offer new or existing businesses.

Texas Enterprise Fund

The 78th Texas Legislature established the Texas Enterprise Fund (TEF) to provide financial resources to help strengthen the state’s economy. The Governor, Lieutenant Governor, and the Speaker of the House must unanimously agree to support the use of TEF for each specific project. Projects that are considered for TEF support must demonstrate a project’s worthiness, maximize the benefit to the state and realize a significant rate of return of the public dollars being used for economic development in Texas. Capital investment; job creation; wages generated; applicant’s financial strength; applicant’s business history; analysis of the relevant business sector; and federal and local government and private sector financial support of a project are all significant factors in approving the use of TEF. https://texaswideopenforbusiness.com/services/texas-enterprise-fund

Texas Enterprise Zone Program

Under the statewide cap of 105 projects per biennium a community with less than 250,000 in population may have up to six enterprise projects. A community with 250,000 in population or greater may have up to nine enterprise projects. 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:

State Sales and Use Tax refunds
An enterprise project is eligible for 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:
    a. If project investment amount is greater than $40,000 and less than $400,000, then refund amount is $2,500 per job based on a minimum of 10 jobs created/retained;
    b. If project investment amount is equal to or greater than $400,000 and less than $1 million, then refund amount is $2,500 per job up to a maximum of 25 jobs created/retained;
    c. If project investment amount is equal to or greater than $1 million and less than $5 million, then refund amount is $2,500 per job up to a maximum of 125 jobs created/retained;
    d. If project investment amount is equal to or greater than $5 million or more, then refund amount is $2,500 per job up to a maximum of 250 jobs created/retained;
  2. Enterprise Project: If project investment amount is equal to or greater than $5 million or more, then refund amount is $2,500 per job up to a maximum of 500 jobs created/retained;
  3. Double Jumbo Enterprise Project: If project investment amount is equal to or greater than $150 million and less $250 million, then refund amount is $5,000 per job up to a maximum of 500 jobs created;
  4. Triple Jumbo Enterprise Project: If 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. https://texaswideopenforbusiness.com/services/tax-incentives

Bonds

Exempt-Facility Bonds
Bonds can be issued to finance certain facilities such as airports, dock and wharf facilities, mass commuting facilities, high-speed inter-rail facilities, or certain qualified hazardous waste facilities (including certain training and storage facilities). There is no limit on the amount of the issue and these issues do not require a reservation under the volume cap. Although the facility must be governmentally owned, it may be leased or subject to management contracts with the business. Other types of exempt bonds include projects for water, sewage and solid waste facilities, facilities for the local furnishing of electricity or gas, and local district heating or cooling facilities. These types of exempt-facility issues must reserve a portion of the volume cap. Exempt-facility bonds that are not governmentally owned may reserve up to $25 million in tax-exempt volume cap allocation each year. However, there is no project size restriction.

Tax-Exempt Industrial Revenue Bonds
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. On January 1, 2007, the maximum bond 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. Generally, the reservation of state ceiling issues is allocated by lottery in October of each program year. For more information, contact the Texas Bond Review Board at (512) 463-1741. https://texaswideopenforbusiness.com/services/financing

Permit Assistance

TCEQ and the Office of the Governor Economic Development & Tourism division 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.

Sales and Use Tax Exemptions

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. https://texaswideopenforbusiness.com/services/tax-incentives

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 percent of the electricity or natural gas consumed by the business directly causes a physical change to a product. https://texaswideopenforbusiness.com/services/tax-incentives

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. https://texaswideopenforbusiness.com/services/tax-incentives

Chapter 380

Chapter 380 (Section 380.001) of the Local Government Code, authorizes municipalities to offer a range of incentives designed to promote state or local economic development. Specifically, it allows for the provision of loans and grants of city funds, as well as the use of city staff, city facilities or city services, at minimal or no charge.

To establish a loan or grant or to offer discounted or free city services, the city must meet the requirements contained in the Texas Constitution and in applicable Texas statutes. Additionally, cities must review their city charters and any other local provisions that may limit the city’s ability to provide such a grant or loan.

Chapter 381 of the Local Government Code allows counties to provide incentives encouraging developers to build in their jurisdictions. A county may administer and develop a program to make loans and grants of public money to promote state or local economic development and to stimulate, encourage and develop business location and commercial activity in the county.

The county also may develop and administer a program for entering into a tax abatement agreement. This tool allows counties to negotiate directly with developers and businesses. http://texasahead.org/tax_programs/ch380-381/

Freeport Exemption

A community may choose to offer the Freeport Exemption for various types of goods that are detained in Texas for a short period of time. Freeport property includes goods, wares, merchandise, ores, and certain aircraft and aircraft parts. Freeport property qualifies for an exemption from ad valorem taxation only if it has been detained in the state for 175 days or less for the purpose of assembly, storage, manufacturing, processing, or fabricating. For certain aircraft parts, a community, by official action, may extend the deadline to 730 days.

For more information, please visit the following links: Texas Constitution Article 8, Section 1-J: http://www.statutes.legis.state.tx.us/Docs/CN/htm/CN.8.htm

Application for Exemption of Goods Exported from Texas (50-113): http://www.window.state.tx.us/taxinfo/taxforms/50-113.pdf

Texas Capital Fund Real Estate Development Program

The Texas Capital Fund Real Estate Development Program is designed to provide financial resources to non-entitlement communities. Funds must be used for real estate development (acquisitions, construction and/or rehabilitation) to assist a business, which commits to create and/or retain permanent jobs, primarily for low- and moderate-income persons. This program encourages business development and expansions located in non-entitlement communities. The minimum award is $50,000 and the maximum is $750,000. The award may not exceed 50 percent of the total project cost. Funds are provided with no interest accruing and with payments based on a 20-year amortization schedule. The Texas Department of Agriculture administers the Texas Capital Fund Program. For more information, please review the following link: http://texasagriculture.gov/GrantsServices/RuralEconomicDevelopment/TexasCapitalFund.aspx

** Total Texas Capital Fund participation from both Infrastructure program and Real Estate Development program may not exceed $750,000.

Texas Capital Fund Infrastructure Program

The Texas Capital Fund Infrastructure Program is an economic development tool designed to provide financial resources to non-entitlement communities. Funds from this program can be utilized for public infrastructure (water, sewer, roads, etc.) needed to assist a business, which commits to create and/or retain permanent jobs, primarily for low and moderate-income persons. The minimum award is $50,000 and the maximum is $750,000. The award may not exceed 50 percent of the total project cost. The Texas Department of Agriculture administers the Texas Capital Fund Program. For more information, please review the following link. http://texasagriculture.gov/GrantsServices/RuralEconomicDevelopment/TexasCapitalFund.aspx

Texas Economic Development Act / Chapter 313

In 2001, the 77th Texas Legislature enacted House Bill 1200 creating Tax Code Chapter 313, Texas Economic Development Act, to encourage large-scale manufacturing, research and development, renewable energy, nuclear and integrated gasification combined cycle electric generation facilities and other large capital investment projects in the State of Texas. It requires companies to invest a specified amount of money to qualify for a ten year limitation on the appraised value of a property for the maintenance and operations portion of the school district property tax. The local school district must elect to participate in order for the company to recognize this benefit. The Act also requires that the limitation on appraised value be a determining factor in the applicant’s decision to invest capital and construct the project in the state and requires that the Comptroller state in writing the basis for the that determination.

The qualifying investment amount is determined on a sliding scale that begins at $100 million for large urban areas and $30 million for rural areas. The qualifying investment amount is reduced for areas with a lower tax base. For more information, please visit http://www.texasahead.org/tax_programs/chapter313/

Ad Valorem/ Property Tax Exemption

Freeport Exemption
A community may choose to offer the Freeport Exemption for various types of goods that are detained in Texas for a short period of time. Freeport property includes goods, wares, merchandise, ores, and certain aircraft and aircraft parts. Freeport property qualifies for an exemption from ad valorem taxation only if it has been detained in the state for 175 days or less for the purpose of assembly, storage, manufacturing, processing, or fabricating. For certain aircraft parts, a community, by official action, may extend the deadline to 730 days.

For more information, please visit the following links: Texas Constitution Article 8, Section 1-J: http://www.statutes.legis.state.tx.us/Docs/CN/htm/CN.8.htm
Application for Exemption of Goods Exported from Texas (50-113): http://www.window.state.tx.us/taxinfo/taxforms/50-113.pdf

Goods-in-Transit Incentive
House Bill 621 of the 80th Texas Legislature amends the Tax Code and the Government Code to add an exemption from ad valorem taxation for goods-in-transit.

To qualify for the exemption, personal property used for assembling, storing, manufacturing, processing, or fabricating purposes would have to be acquired in Texas or imported into Texas and stored at a Texas location in which the owner of the goods does not have a direct or indirect ownership interest. The goods-in-transit would have to be transported to another location in Texas or out of state no later than 175 days after the property was acquired in or imported into the state. Oil and gas and their immediate derivatives, aircraft, and dealer’s special inventories would not qualify for the exemption.

For more information, please visit the following links:
http://www.capitol.state.tx.us/BillLookup/BillSummary.aspx?LegSess=80R&Bill=HB621 http://www.capitol.state.tx.us/tlodocs/80R/fiscalnotes/html/HB00621F.HTM

Pollution Control Equipment Incentive
A Texas constitutional amendment providing an exemption from property taxation for pollution control was approved in 1993. The intent was to ensure that compliance with environmental mandates, through capital investments, did not result in an increase in a facility’s property taxes. A facility must first receive a determination from the Texas Commission on Environment Quality (TCEQ) that property is for pollution control purposes. That positive use determination is then provided to the local appraisal district, which must accept the TCEQ’s decision and grant the property an exemption from property taxes.

To be eligible for a positive use determination, the property must have been purchased, acquired, constructed, installed, replaced, or reconstructed after January 1, 1994, to meet or exceed federal, state, or local environmental laws, rules, or regulations.

For more information, please see the following link: https://texaswideopenforbusiness.com/services/tax-incentives or contact David Greer with the Texas Commission on Environmental Quality at (512) 239-5344.

Renewable Energy Incentives

Wind and Solar Energy Tax Exemptions and Deductions
Tax Code Section 171.056 extends a franchise tax exemption to manufacturers, sellers, or installers of solar energy devices. The state also permits a corporate deduction from the state’s franchise tax for renewable energy sources. Business owners may deduct the cost of the system from the company’s taxable capital or deduct 10 percent from the company’s income.

Wind energy qualifies under the term “solar energy” for the exemption and deduction under Sections 171.056 and 171.107. For more information on the tax exemption, visit the State Energy Conservation Office’s web site at http://www.seco.cpa.state.tx.us/re/incentives-taxcode-statutes.php or contact the Comptroller of Public Accounts.

Texas property tax code permits a 100 percent exemption on the appraised value of solar, wind or biomass energy devices installed or constructed for the production and use of energy on-site.

See Texas property tax Form 50-123, “Exemption Application for Solar or Wind-Powered Energy Devices” to claim this exemption.

Texas also offers a loan program for eligible efficiency technologies. The “LoanSTAR” program is available to schools, hospitals and local governments. The low interest loans are capped at a $5 million maximum and are required to meet certain technical guidelines including a detailed energy assessment report.

Web site: http://seco.cpa.state.tx.us/
Franchise tax questions: (800) 531-5441, ext. 5-9952 or (512) 305-9952
Property tax questions: (800) 531-5441, ext. 5-9806 or (512) 305-9806
Other Renewable and Conservation Incentives: http://www.seco.cpa.state.tx.us/funding/

Economic Development & Diversification In-State Tuition for Employees

The Economic Development and Diversification In-State Tuition incentive 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

boerne-kendall-county-misty-mayo

For more information on Relocation Incentives in Kendall County, please contact Misty Mayo, President/CEO, Boerne Kendall County EDC

830-331-9070 |  Misty@bkcedc.com

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