City of El Paso, El Paso County, and Texas Incentives

A variety of incentives are offered through the City of El Paso, El Paso County, the State of Texas, and other institutions to help make your business’s relocation or expansion as smooth as possible. Below you’ll find more information on a range of incentives designed to benefit businesses considering El Paso.


For questions, or if you have specific needs that are not addressed in the following incentive programs, please contact Marcos Delgado or Tony Ramirez at 915-298-1000. We would be happy to share more information or explore options for customized incentive plans.

 

State of Texas Incentives

PROGRAM NAME: MANUFACTURING MACHINERY & EQUIPMENT

Description: 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. 

Type of Incentive: Tax Exemption

Granting/Administering Authority: State of Texas

Eligibility Requirements: To qualify for a manufacturing exemption, the taxpayer must manufacture, fabricate or process tangible personal property for sale; repair tangible personal property from their own inventory for sale (rebuilders); or repair tangible personal property from their own inventory for rental.
 

PROGRAM NAME: NATURAL GAS & ELECTRICITY 

Description: 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 

Type of Incentive: Tax Exemption

Granting/Administering Authority: State of Texas

Eligibility Requirements: 50% of electricity or natural gas consumed by the business must directly cause a physical change to the product.


PROGRAM NAME: FRANCHISE TAX EXEMPTION & DEDUCTION FOR BUSINESS RELOCATION 

Description: Effective Jan 1, 2014, House Bill 500 provides authorization for a company to deduct moving expenses from their apportioned margin while calculating their franchise liability. A taxable entity may deduct relocation costs incurred in relocating the taxable entity’s main office or another principal place of business to this state from another state if the business meets the criteria in Texas Tax Code Section 171.109(b). The taxable entity must take the deduction on the entity’s first annual report described by Rule 3.584(c) (1)(C)(i). The deduction may not reduce apportioned margin below zero, and no carryover of unused deduction is allowed. 

Type of Incentive: Tax Exemption

Granting/Administering Authority: State of Texas

Eligibility Requirements: Companies must relocate their principal place of business from out-of-state into the State of Texas to obtain the deduction.
 

PROGRAM NAME: FREEPORT EXEMPTION 

Description: 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. For certain aircraft parts, a community, by official action, may extend the deadline to 730 days. 

Type of Incentive: Tax Exemption

Granting/Administering Authority: State of Texas

Eligibility Requirements: 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.
 

PROGRAM NAME: POLLUTION CONTROL EQUIPMENT INCENTIVE 

Description: 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 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. 

Type of Incentive: Tax Exemption

Granting/Administering Authority: State of Texas

Eligibility Requirements: 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. 


PROGRAM NAME: IN-STATE TUITION FOR EMPLOYEES 

Description: 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.

Type of Incentive: Higher Education

Granting/Administering Authority: State of Texas

Eligibility Requirements: 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.

 

PROGRAM NAME: TEXAS ENTERPRISE FUND (TEF)

Description: The fund is a cash grant used as a financial incentive tool for projects that offer significant projected job creation and capital investment where a single Texas site is competing with another viable out-of-state option.

Type of Incentive: Grant

Granting/Administering Authority: State of Texas

Eligibility Requirements:

Competition with another state for the project must exist and the business must not have already made a location decision.

Projected new job creation must be significant – past recipients have typically created more than 75 jobs in urban areas or more than 25 in rural areas.

The new positions must be high-paying jobs – above the average wage of the county where the project would be located. The average El Paso County wage is $18 per hour.

Capital investment by the company must be significant.

A significant rate of return on the public dollars being invested in the project must be demonstrated.

The project must have community involvement from the city, county, and/or school district, primarily in the form of local economic incentive offers.

The applicant’s business sector must be an advanced industry that could potentially locate in another state or county.

The Governor, Lieutenant Governor, and the Speaker of the House must unanimously agree the support the use of TEF for each specific project.

Method of Calculation Value: Award amounts are influenced by the number of jobs to be created, the expected time frame for hiring, and the wages to be paid.

Estimated Value to the Project: TBD

 

PROGRAM NAME: SKILLS DEVELOPMENT FUND (SDF)

Description: The Skills Development Fund program assists businesses and trade unions by financing the design and implementation of customized job-training projects. This fund successfully merges business needs and local customized training opportunities into a winning formula to increase the skills levels and wages of the Texas Workforce.

Type of Incentive: Grant for Tuition, curriculum development, instructor fees and training materials. The average grant award is $1,800 per employee.

Granting/Administering Authority: Texas Workforce Commission

Eligibility Requirements: To be considered for a Skill Development Fund grant, the private business, business consortium, or trade union must:

Partner with an eligible grant applicant, i.e. a public community or technical college, the Texas Engineering Extension Service, or a private, nonprofit community-based organization in partnership with one of those institutions.

Be actively involved in the planning and design of the customized training project.

Pay wages to the employees who successfully complete the training program that are equal to or greater than the prevailing wage for the occupation in the local labor market.

Disclose any other state or federal grant funds sought or awarded for the proposed training project.

Sign an agreement with the grant applicant outlining each entity’s roles and responsibilities in the training project, including reporting requirements related to trainee participation.

Provide equal employment opportunity documentation as well as information or the occupations for training, employment benefits, wages and social security numbers for trainees.

Use WorkinTexas.com to post openings for new workers trained under the project.

Method of Calculation Value: Grants for a single business may be limited to $500,000.

Estimated Value to the Project: TBD

 

Other Incentives

PROGRAM NAME: SCHOOLS DISTRICT PROPERTY TAX ABATEMENT (CHAPTER 313)

Description: Granted on all or a portion of the increased taxable value of School District’s portion of real property and/or personal property tax over base year value. Property Tax Abatements can be granted for up to 10 years.

Type of Incentive: Abatement

Granted/Administering Authority: Corresponding School District

Eligibility Requirements: Depends on Impact to the Community, and Texas State Comptroller policy.

Method of Calculation Value: Maximum capped assessed value amount for up to 10 years. Value dependent on Investment Amount Category.

Current Rate for School District Property Tax: $1.274794 per $100 of appraised property value.

Estimated Value to the Project: TBD

 

PROGRAM NAME: EL PASO COMMUNITY COLLEGE PROPERTY TAX ABATEMENT

Description: Granted on all or a portion of the increased taxable value of El Paso Community College’s portion of real property and/or personal property over base year value. Property Tax Abatements can be for up to 10 years.

Type of Incentive: Abatement

Granting/Administering Authority: El Paso Community College

Eligibility Requirements: Depends on Impact to the Community

Method of Calculation Value: Up to an 80% abatement on increased taxable value of personal/real property

Current Rate for EPCC Property Tax: $0.134909 per $100 of appraised property value

Estimated Value to the Project: TBD