Incentives Available for your Business in Jarrell, Texas
The goal of the Jarrell Economic Development Board is to assist businesses in gaining the maximum benefit from local, state, federal, and other government entity incentives programs.
You are wanted in Jarrell and in Texas. In recent years Texas has recruited more jobs and investment to our state than any other state in the nation. Aside from being a great place to live and work, Texas is one of only six states in the U.S. that does not have a State corporate and individual income tax.
Following is introductory information on; Local Incentives, State Incentives, Utilities and Permitting, Work Force Training, and Resources. The goal of any incentive package developed is determined by the following criteria:
-- the number of jobs created
-- the average wage of those new jobs and the gross annual payroll generated
-- project's capital investment
-- the amount of new taxes generated by the project
-- the environmental sustainability of a project
Finally, all incentives are subject to approval by the Jarrell Economic Development Corporation Board of Directors.
Type A Economic Development Sales Tax
The voters of Jarrell approved the creation of the Jarrell Economic Development Corporation (JEDC) and JEDC receives a portion of the total local sales tax receipts. This major tool is available to businesses that wish to expand or locate in Jarrell and allows Jarrell to address manufacturing and industrial development. These funds may be used to acquire or pay for land, buildings, equipment, facility expenditures, and targeted infrastructure and improvements.
Property Tax Abatements
Personal and real property tax abatements are available to qualified businesses. On a case-by-case basis, the city will consider providing tax abatement for developments which meet the overall goals and objectives of the City.
Triple Freeport Exemption
Freeport Exemption waives tax collection on specific personal property known as freeport goods. 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. Freeport goods typically are defined as goods, wares, ores and merchandise other than oil, gas and petroleum products (defined as liquid and gaseous materials immediately derived from refining petroleum or natural gas) and to aircraft or repair parts used by a certificated air carrier.
All three taxing entities, Williamson County, CIty of Jarrell, and the Jarrell Independent School District, have approved the exemption.
Foreign Trade Zone
A Foreign Trade Zone (FTZ) is a site within the United States, in or near a U.S. Customs port of entry, where foreign and domestic merchandise is generally considered to be in international commerce. Foreign and domestic merchandise may enter this zone without a formal Customs entry or the payment of Customs duties or government excise taxes. Jarrell is in the service area of FTZ 183, Austin and the surrounding area.
If the final product which has been handled or manufactured within the FTZ, and is re-exported from the United States, no U.S. Customs duty or excise tax is levied. If, however, the final product is imported into the United States, Customs duty and excise taxes are due only at the time of transfer from the FTZ and formal entry into the United States.
Tax Increment Financing
Tax increment financing is a tool that the City of Jarrell can use to publicly finance needed structural improvements and enhanced infrastructure within a defined area. These improvements usually are undertaken to promote the viability of existing businesses and to attract new commercial enterprises to the area.
Texas Enterprise Fund
In 2003 the Texas Legislature established the Texas Enterprise Fund (TEF) to provide financial resources to help strengthen the state's economy. The Fund is used primarily to attract new business to the state or retain an existing business that is undertaking a substantial expansion, and is often called the largest “deal closing” fund of its kind in the nation. The Fund may be appropriated for a variety of economic development projects, including infrastructure development, community development, job training programs and business incentives, as well as to attract technology and biotechnology businesses and support university research.
Texas Emerging Technology Fund
The Fund provides grants intended to improve research at Texas universities, help start-up technology firms get off the ground, and move inventions out of the lab and into the hands of consumers faster.
Emerging technology projects are eligible for funding if they will result in the creation of high quality new jobs in Texas or have the potential to result in a medical or scientific breakthrough.
State Sales & Use Tax Exemptions
Manufacturing Machinery & Equipment
Leased or purchased machinery, equipment, replacement parts, and accessories that have a useful life of more than six months, and 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.
Clean rooms used in the production of semiconductor components or in the biotechnology industry are exempt as manufacturing equipment. That includes property affixed to or incorporated into realty, including integrated systems, fixtures, lighting, movable partitions, piping and all property necessary or adapted to reduce contamination or to control airflow, temperature and humidity. However, this exemption does not include the structural shell to which these improvements are attached.
Natural Gas & Electricity
Texas companies are exempt from paying state 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% of the electricity or natural gas consumed by the business directly causes a physical change to a product.
Texas Leverage Fund
The Texas Leverage Fund (TLF) is an “economic development bank” offering an added source of financing to communities that have passed the economic development sales tax. Approximately 500 communities in Texas have adopted the local economic development sales tax. The Office of the Governor, Economic Development & Tourism Division may loan funds directly to a local Industrial Development Corporation (IDC) to finance eligible projects. Sales tax revenues pledged by the IDC need only be sufficient to cover projected annual debt service as specified in the Texas Leverage Fund Program Guidelines. This allows cities to leverage their economic development sales tax and to pursue additional projects.
Pollution Control Equipment / Property Tax Exemption
A facility must first receive a determination from the Texas Commission on Environmental 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.
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 (which can include certain capital and administrative costs).
These issues must receive a reservation under the State’s volume limitation (“volume cap”) managed by the Texas Bond Review Board. The Tax Reform Act of 1986 imposes a volume ceiling on the aggregate principal amount of “private activity bonds” that may be issued with the State during any calendar year. Generally, the reservation of state ceiling issues is allocated by lottery in October each program year. For more information on the “volume cap” or the lottery dates, contact the Texas Bond Review Board at 512/463-1741.
Utilities and Permitting:
Jarrell has the ability to provide "fast tracking" of permits in order to move your construction project from conception to certificate of occupancy. By doing so, this generally results in savings of time and money which can be significant.
Texas Commission for Environmental Quality 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.
Work Force Training:
Skills Development Fund
The Skills Development Fund is an innovative program created to assist Texas public community and technical colleges finance customized job training for their local businesses. The Fund was established by the Legislature in 1995 and is administered by the Texas Workforce Commission.
Grants are provided to help companies and labor unions form partnerships with local community colleges and technical schools to provide custom job training. Average training costs are $1,000 per trainee; however, the benefit may vary depending on the proposal.
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. The Fund makes grants available to eligible public colleges or to eligible private, non-profit organizations to provide customized job training and training support services for specific employers.
A joint application from the employer and the eligible public college and/or eligible private, non-profit organization is required to be submitted to the Local Workforce Development Board for review and comment prior to approval.
Economic Development & Diversification In-State Tuition
The Economic Development and Diversification In-state Tuition incentive may be offered by the Economic Development & Tourism division of the Office of the Governor to qualified businesses that are in the decision-making process to relocate or expand their operations into Texas. The incentive allows employees and family members of the qualified businesses to pay the Texas resident tuition rate at a Texas public institution of higher education without first establishing residency if the business became established as part of the State’s Economic Development & Diversification Program.