Local Incentives
Type A and Type B Sales Tax
The Development Corporation Act of 1979 gives cities the ability to finance new and expanded business enterprises in their local communities, and authorizes cities to adopt a sales tax to fund the corporations and defined projects.

A "Type A" sales tax is primarily intended for manufacturing and industrial development and may be used to fund land, buildings, equipment, facilities expenditures, targeted infrastructure and improvements for projects.

A "Type B" sales tax may be used for any project eligible under Type A rules and several other project types including quality of life improvements.

Property Tax Abatement
Tax abatements are an economic development tool available to cities, counties ans special districts to attract new industries and to encourage the retention and development of existing businesses through property tax exemptions or reductions. Southeast Texas offers abatement opportunities to exempt part of the increased value in real or personal property from taxation.

Chapter 380/381 Economic Development Agreements
Chapter 380 of the Local Government Code authorizes municipalities to offer incentive designed to promote economic development such as commercial and retail projects. Specifically, it provides for offering loans and grants of city funds or services at little or no cost to promote state and local economic development and to stimulate business and commercial activity.

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.

Texas Economic Development Act
An appraised value limitation may be extended to a taxpayer who agrees to build or install property and create jobs in exchange for an eight-year limitation on the taxable value of the property. The value limitation applies to the local school district maintenance and oeprations tax portion of the property tax and a tax credit.

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