New Property Tax Incentive Program Launched

A new economic incentives program was launched on Thursday by Texas. This program intends to bring new companies and jobs to the state. This will replace a prior job creation system, which lawmakers have phased out after complaints that it contributed to inequity in public schools.

This program was passed with bipartisan support by lawmakers last year; this will also provide property tax cuts to eligible companies that move into Texas communities in exchange for job creation.

This will replace Chapter 313, which will widely criticize the old program that expired at the end of 2022. This new program would include more oversight of participating communities, introduce additional job and salary requirements, and halve Chapter 313’s property tax cuts.

Through this new program, companies would be able to receive a 10-year reduction in their property taxes to help provide funds for local school districts. The state has decided to pay school districts to partially restore tax money lost to cuts.

This program will somehow eliminate an oft-criticized feature of Chapter 133 in which companies are no longer able to make direct payments to schools in return for tax breaks, a provision critics say caused inequality in school funding.

Abbott said last February that Texas felt that this program would lead to the loss of Chapter 133, which would make the state lose out on a “massive” corporate project to New York in 2023. Companies that have participated in the new programs need to create a specific number of new full-time jobs, salaried or contracted, with health benefits and competitive pay for salaried positions. Companies also need to submit their report to the state on their compliance with these rules every two years.

These companies will receive 50% abatement until and unless their projects are situated in economically disadvantaged areas that have been declared as “opportunity zones” by the federal government, where tax cuts are stretched to 75%. This change in the companies will follow the criticism of renewable energy companies for which Chapter 313 has been abused to obtain unreasonable assistance in a state dependent on its oil and gas industry.

The companies that are eligible under these policies are those that consist of manufacturing support, development of natural resources, technologies like semiconductor chips, and innovation, including research and development firms.

Before companies that apply can move into Texas communities, school districts in considered areas will host public hearings to decide whether more state evaluation is necessary. The state comptroller could set a one-time fee of up to $30,000 to cover evaluation costs paid by companies.

If companies that are out of compliance with stipulations of the new program, like job creation or salary thresholds, the governor or school district can end deals at any point. The new program is located in Chapter 403 of the state’s tax code and will expire in 10 years if legislators do not renew it sooner.

Read Also – Name finalized for President of Stephen F. Austin State University