Potential Incentives

The City of Texarkana offers a variety of Economic Development incentives designed to create jobs, new capital investment and spur redevelopment within our community. Incentive offerings are provided on a case-by-case basis and are designed to meet the specific needs of each client. Therefore, the following list of incentive offerings is designed simply as a starting point for further discussions with our experienced Economic Development staff members.

  • Income Tax
  • City and County Tax Abatement
  • Infrastructure Participation
  • Fee Waivers
  • Texas Enterprise Fund
  • Texas Enterprise Zone Program
  • Tax Exemptions
  • Tax Increment Financing District (TIF)/Tax Increment Reinvestment Zones
  • Industry Training Grants 
  • PACE Program 
  • New Market Tax Credits 

INCOME TAX

Texas has no state income tax and Texarkana has no municipal personal income tax.

TAX ABATEMENTS - CITY OF TEXARKANA  

Tax abatement may be granted for eligible facilities on all or a portion of the increased taxable value of real and/or personal property over the Base Year Value. The City Council shall have final decision-making authority on a tax abatement request.

TAX ABATEMENTS - BOWIE COUNTY

Projects may be eligible for an abatement of County taxes on the value added to real or new business personal property. A separate application for abatement of County taxes must be filed with the County Judge’s Office. The Bowie County Commissioners’ Court has final authority on the level and term of the abatement program.

INFRASTRUCTURE PARTICIPATION

The City of Texarkana has a track record of facilitating development through enhancement of water, sewer, and roadway infrastructure relevant to sites selected for significant projects as needed.

FEE WAIVERS

The City of Texarkana may provide for a full or partial waiver of all development fees including Platting, Building Permit, Electrical, Mechanical, and Plumbing on eligible projects.

TEXAS ENTERPRISE FUND - STATE OF TEXAS

The City of Texarkana can pursue grant funding for eligible projects under the Texas Enterprise Fund. The 78th Texas Legislature established the Texas Enterprise Fund 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 the Texas Enterprise Fund for each specific project.

Projects that are considered for Enterprise Fund support must demonstrate a project’s worthiness, maximize the benefit to the State of Texas and realize a significant rate of return of the public dollars being used for economic development in Texas. Capital investment, job creation, wages generated, financial strength of the applicant, applicant’s business history, analysis of the relevant business sector, and federal and local government and private sector financial support of a project will all be significant factors in approving the use of the Enterprise Fund.

TEXAS ENTERPRISE ZONE PROGRAM - STATE OF TEXAS

The City of Texarkana can nominate projects as an enterprise project under the Texas Enterprise Zone Program. Upon the City’s 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:

  • An enterprise project is eligible for a refund of state sales and use taxes paid for building materials, machinery and equipment, electricity and natural gas purchased and consumed in the normal course of business and depending on investment amount and number of jobs created/retained.
  • Further eligible items include tangible personal property purchased and consumed in the normal course of business and taxable services.

TAX EXEMPTIONS

Projects could be eligible for state sales and use tax exemptions on 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.

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.

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.

TAX INCREMENT FINANCING DISTRICT (TIF)/TAX INCREMENT REINVESTMENT ZONES (TIRZ)

The terms "TIF," "Tax Increment Finance District," "TIRZ," and "Tax Increment Reinvestment Zone," are terms used interchangeably. Tax Increment Reinvestment Zones are created by authority of the Tax Increment Financing Act, Texas Tax Code, Chapter 311.

The Texarkana City Council created the reinvestment zones, established a Board of Directors for each TIRZ and has granted the boards authority to exercise all powers necessary to implement their respective project and financing plans, consistent with state law.

Texarkana has two Tax Increment Reinvestment Zones (TIRZ) described more fully elsewhere on this site.

INDUSTRY TRAINING GRANTS (Texas Skills Development Fund Grant)

If you are a Texas employer and have a desire to collaborate with other partners and are committed to seeing a project through, then the Skills Development Fund is something for your business to look into.

How does it work?

A business, consortium of businesses, or trade union identifies a training need, and then partners with a public Community or Technical college to fill its specific needs. Businesses work with college partners to submit proposals, develop curricula and conduct training. The Skills Development Fund pays for the training, the college administers the grant, and businesses create new jobs and improve the skills of their current workers.

The Texarkana region is fortunate to have two community colleges leading the charge in industry training.

Learn more

PACE (Property Assessed Clean Energy) PROGRAM

PACE enables commercial property owners to obtain affordable, long-term loans covering up to 100 percent of the cost for energy efficiency, water conservation, and on site generation technologies. 

PACE secures private financing for a term as long as the projected useful life of the improvements, resulting in utility cost savings that exceed the amount of the repayment. You can modernize your facility without fear of over-investment because if you sell the facility, the PACE loan repayment obligation transfers with the property to the new owner. The program is an optional financing tool – a mechanism to enable owners of commercial and industrial property to gain access to funds for projects that will reduce water and energy utility costs under the most flexible and favorable terms.

Typical Examples of Qualified Improvements: 

  • High efficiency chillers, boilers, and furnaces
  • Systems to capture, treat and use other on-site sources of water (condensate, rainwater, reverse osmosis reject water, etc.)
  • High efficiency lighting
  • Water conservation equipment
  • Wastewater onsite reuse systems
  • Energy management systems
  • Insulation & air sealing
  • HVAC systems
  • Energy recovery & redistribution systems
  • Greywater systems
  • High efficiency toilets
  • Waterless urinals
  • Solar hot water
  • Solar photovoltaics

NEW MARKET TAX CREDIT PORTFOLIO 

NMTC investors provide capital to community development entities (CDEs), and in exchange are awarded credits against their federal tax obligations. Investors can claim their allotted tax credits in as little as seven years—5 percent of the investment for each of the first three years and 6 percent of the project for the remaining four years—for a total of 39 percent of the NMTC project. A CDE can be its own investor or find an outside investor. Investors are primarily corporate entities—often large international banks or other regulated financial institutions—but any entity or person is eligible to claim NMTCs.

The City of Texarkana, Texas is actively involved with Bowie County and the ARTX Regional Economic Development Initiative (REDI) to maintain a portfolio of NMTC projects in the Texarkana region. This portfolio is presented to the awarded CDEs in the area to attract potential investments. 


INCENTIVE DEFINITIONS

The Texas Enterprise Fund provides the state’s leaders with a “deal closing fund” that has the flexibility and financial resources to help strengthen the state’s economy. The fund can be used for a variety of economic development projects, including infrastructure development, community development, job training programs and business incentives. Before funds can be awarded, the Governor, Lieutenant Governor, and Speaker must unanimously agree to support the use of the Texas Enterprise Fund for each specific project. These funds will be used primarily to attract new businesses to the state or assist with the substantial expansion of an existing business as part of a competitive recruitment situation.

The Emerging Technology Fund (ETF), created by the Texas Legislature at the urging of Governor Rick Perry provides Texas with an unparalleled advantage by expediting the development and commercialization of new technologies, and by recruiting the best research talent in the world. Matching and commercialization funds coupled with additional federal and outside investments mean new technology is emerging in Texas.

Public Improvement Districts (PIDS) are special areas created at the request of the property owners in the district. These owners pay an additional assessment with their taxes, which is used for services beyond the City’s basic service level.

Business Improvement Districts (BIDS) work the same as PIDs, which are special areas created at the request of the property owners in the district. Currently, the city only has one active BID program in downtown to help business owners with services beyond the City’s basic service level. These owners also pay an additional assessment with their taxes to achieve this.

Enterprise Zones are economically distressed geographic areas that have been targeted for business development. Assistance is provided through financial incentives offered by both the State of Texas and the City in which the zone is located. State incentives are directed toward encouraging businesses to locate and expand in an enterprise zone, primarily by offering reductions in sales and franchise taxes to businesses that meet certain requirements.

Tax Increment Finance/Reinvestment Zones

The purpose of the TIF/TIRZ districts is to reimburse private developers for public infrastructure improvements that may contribute to a financial gap on a specific project. This reimbursement is funded by the added taxes generated by the new development that occurs within the boundaries of the district or zone.