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Competitive Incentives

With local, state and federal incentives, San Antonio is full of unique advantages and opportunities for your company.

Local Incentives

Tax Abatement

Tax Phase-In (abatement) is available from the City of San Antonio, Bexar County and most surrounding communities. It is designed to lower the property tax liability on the value of new investments made locally. The program targets certain types of companies that create or sustain jobs in the local area. Targeted industries include agribusiness, aviation, biotechnology, creative services, environmental technology, finance, IT, manufacturing, and others. Eligible companies can apply for reduction of real and personal property taxes if specific job creation, wage levels and investment thresholds are reached and maintained over the period of the abatement.

For detailed information and guidelines, click on City of San Antonio Tax Abatements and/or Bexar County Tax Abatements. To access the joint application (City & County), click here.

Freeport Exemption

The City of San Antonio, Bexar County and some independent school districts allow a personal property tax exemption to companies that deal with goods in-transit or inventories used in the manufacturing process. To qualify for the exemption, inventory must be used for the purpose of assembly, storage, manufacturing, processing, or fabricating. In addition, it must be transported to destinations outside Texas no later than 175 days after the date acquired in Texas or imported into Texas. For more information about Freeport Exemption, visit www.sanantonio.gov.

Foreign Trade Zone

San Antonio is home to Foreign Trade Zone (FTZ) #80. The new Alternative Sites Framework recently approved for FTZ#80 allows businesses to locate anywhere in the FTZ#80 region and receive benefits. An FTZ statue allows a business to import/export foreign goods or materials, place their goods in the zone, without formal U.S. Customs entry and excludes paying formal duties, or government excise taxes until the product enters the United States market. San Antonio is an FTZ Alternative Sites Framework location.

Industrial District

The City may designate, at the request of the applicant, a qualified parcel of land as an industrial district, providing that it is 10 acres or larger and adjoins (in most cases) the city limits of San Antonio. The property must be in the extra-territorial jurisdiction of the City and must be in the control of a single owner or developer.

A contract is signed by the City and the owner of the land specifying that said parcel will be exempt from annexation for a period not to exceed seven years, hence exempting the property from City ad valorem taxes. It also specifies that the City will provide certain municipal services for the same period at an established rate, provided that the property is utilized for industrial purposes. Visit www.sanantonio.gov for more information

Industrial Development Bonds

To promote industrial development, industrial revenue bonds are available through San Antonio’s Industrial Development Authority (IDA) and the County’s Industrial Development Corporation (BCIDC). IDA bonds are tax-exempt revenue bonds that can be issued for new construction, building improvements, and the purchase of machinery and equipment. IDA bonds are available for projects with total cost up to $10 million. In addition, the South Texas Business Fund offers loans for small-to-medium sized businesses at competitive interest rates. Visit www.sanantonio.gov for more information about the IDA. Visit www.bexar.org/ed for more information about the BCIDC.

Tax Increment Financing

In a city-designated area, a certain percentage of tax revenue is designated specifically for public infrastructure improvements. The area must face problems that impede redevelopment and must be considered a distressed or blighted area to be designated as such. Visit www.sanantonio.gov for more information.

Pollution Control Property

Bexar County Appraisal District (BCAD), in cooperation with the Texas Natural Resource and Conservation Commission (TNRCC), may grant exemptions from all or part of real or personal property taxes for a facility, device or method that controls air, water or land pollution. The definition of “facilities, devices or methods” encompasses buildings, machinery, equipment and property investments.

Interested parties may complete a TNRCC exemption application, which requests information regarding anticipated environmental benefits, the costs, and the purpose of the facility, method or device. The application is then submitted to the chief appraiser of the Bexar County Appraisal District for processing.

City of San Antonio Incentives

City of San Antonio Economic Development Incentive Fund (EDIF)

The primary purpose of the EDIF is to make funds available for offering financial incentives in the form of economic development grants and/or loans in accordance with Chapter 380 of the Local Government Code to companies seeking to create or retain jobs and invest in San Antonio.

Eligible project categories include:

a) the attraction and recruitment of companies who plan to create jobs and investment in targeted industries, including corporate headquarters.

b) The retention/expansion of local companies, including corporate headquarters, who are considering relocating and/or expanding in communities outside of San Antonio.

c) Promote development and investment at and around active and former military bases and in distressed areas, such as in the Inner City Reinvestment/Infill Policy (ICRIP) Area, State Enterprise Zone census tract areas and the City’s designated Reinvestment Plan Areas.

d) Promote development at and around higher educational institutions and other nongovernmental institutions, such as the Texas Research and Technology Foundation, which help create jobs and support growth in the targeted industries.

Fee Waivers

The City of San Antonio and the San Antonio Water System (SAWS) support policies that promote growth and development in targeted areas of the City, as described in the City’s Target Investment Area (TIA). The TIA specifically identities targeted areas that are currently served by public infrastructure and transit, but under-served by the residential and commercial real estate markets.

SAWS commits $4 million annually in impact fee waivers to be used in the TIA. The award and distribution of City and SAWS fee waiver incentives will follow the goals to increase new development (housing and commercial) on vacant infill lots; increase redevelopment of underused buildings and sites; increase rehabilitation, upgrade, and adaptive reuse of existing buildings; increase business recruitment and expansion in the City’s targeted industries.

For more information, visit www.sanantonio.gov

Bexar County Incentives

Innovation Fund

Grants for companies, educational service providers, and not-for-profit entities that support the innovation-focused digital information technology sector. The purpose of the Innovation Policy for Economic Development is to spur and accelerate the growth of the innovation-focused digital information technology sector within Bexar County through the following programs: Recruitment, Expansion, Talent Development Competition, Professional / Technical Training, and Brand Building. Grant amounts will depend on the strength of the project’s positive impact on the Technology Ecosystem, available Innovation Funds, funding or other incentives provided by other partners, and is subject to Commissioners Court approval.

Industrial Development Corporation

The Bexar County Industrial Development Corporation’s primary activity is to issue tax-exempt Industrial Development Bonds to finance projects for manufacturing facilities which will create or retain jobs, or expand the property tax base. The bonds must be used to finance projects for manufacturing, producing, or processing a tangible product. Equipment intensive industries such as plastics, printing, metal working, paper, and assembly are a few likely candidates for Industrial Development Bonds.

For more information, visit the Bexar County Incentives home page.

STATE INCENTIVES

Enterprise Programs

Texas Enterprise Fund

The Texas Enterprise Fund (TEF), the largest “deal-closing” fund of its kind in the nation and should be explored once a finalist city in Texas is determined. The TEF becomes available when there is on Texas City competing for a project with another city (cities) outside the state. The TEF can be used for a variety of economic development projects, including infrastructure development, community development, job training programs and business incentives. The Governor’s Office works closely with the San Antonio Economic Development Foundation to tailor incentive packages that best meet the needs of local communities and businesses. Qualified projects of similar stature have been offered $ 6,000 – $ 10,000 per new job.

Projects that are considered for TEF support must demonstrate a project’s worthiness, maximize the benefits to the state of Texas and realize a significant rate of return of the public dollars being used for the economic development of Texas. For more information about this enterprise program, visit www.governor.state.tx.us

Texas Enterprise Fund Projects
South Texas Region (San Antonio, Texas)
Rackspace $22.0 M
JP Morgan Chase (formerly Washington Mutual) $15.0 M
Medtronic $6.0 M
Petco Animal Supplies $3.1 M
Nationwide Mutual Ins. $2.5 M
Maxim $1.5 M
Becton, Dickinson & Co. $1.5 M
Allstate Insurance $1.1 M
Kohl’s Department Stores $750 K
KLN Steel Products $450 K
Source: Office of the Governor of Texas Economic Development and Tourism

State Enterprise Zone Program

The Texas Enterprise Zone Program is an economic development tool for local communities to partner with the state of Texas to promote job creation and capital investment in economically distressed areas of the state. Local communities must nominate a company as an Enterprise Project to be eligible to participate in the Enterprise Zone Program. Legislation limits allocation to the state and local communities per biennium. The state accepts applications quarterly with deadlines on the first working day of March, June, September and December. Designated projects are eligible for state and use tax refunds on taxes paid for equipment and machinery, materials, taxable services, electricity and other business expenses. For more information about the benefits and criteria necessary to qualify for this incentive, please visit www.governor.state.tx.us.

To view the State Enterprise Zone map, click here.

For more information about state business climate index, state and local tax burdens and state and local corporate income tax collections per capita, click here.

Defense Economic Readjustment Zone

Tax and regulatory incentives are available to companies that locate within the State-designated Defense Economic Readjustment Zone, which encompasses the business park, the Port of San Antonio as well as portions of Brooks AFB and Military Drive. San Antonio’s Defense Economic Readjustment Zone offers a number of business advantages: access to an outstanding workforce; high-level of infrastructure development; desirable zoning and land use; and availability of both developable land and existing structures. The Defense Economic Readjustment Zone Program is modeled on the Enterprise Zone Program. Companies that apply and are selected by the Texas Department of Economic Development and the San Antonio City Council are eligible for State tax incentives, including franchise tax credit for income derived from services. For more information about the benefits and criteria necessary to qualify for this program, please visit www.governor.state.tx.us.

For more information about state business climate index, state and local tax burdens and state and local corporate income tax collections per capita, click here.

FEDERAL INCENTIVES

San Antonio Empowerment Zone

San Antonio is one of eight cities throughout the country designated as a Round III Empowerment Zone (EZ) by the U.S. Department of Housing and Urban Development. Businesses located in the EZ are eligible to receive wage credits, tax incentives, and low interest bond financing to help stimulate job growth, promote economic development and create affordable housing opportunities in targeted areas of the city. For more information, visit www.sanantonio.gov.

To view the San Antonio Empowerment Zone map, click here.

EB-5 Immigrant Investor Program

Governed by the federal government and administered by U.S. Citizens and Immigration Services (USCIS), the EB-5 Program provides a pathway to U.S. citizenship for foreign individuals and their dependent family members through investment in the United States. To be eligible for a visa and permanent resident status, individuals must invest a minimum of $500,000 or $1 million in a new commercial enterprise that creates at least 10 jobs for a minimum of two years.

For complete information about the program, please visit the USCIS EB-5 website.

TAXES & INCENTIVES

The SAEDF staff is available to prepare an individualized informational package on taxes and incentives specific to your needs and potential location in San Antonio. Call us and apply for a custom incentive package. We can help you explore the advantages San Antonio has to offer.

Business Taxes

Sales & Use Tax Rate for the City of San Antonio in the County of Bexar
TEXAS 6.250%
SAN ANTONIO *1.250%
San Antonio MTA Metropolitan Transit Authority .500%
San Antonio ATD Advanced Transportation District .250%
BEXAR **0.000%
San Antonio Area Total Tax Rate 8.250%
* Texas state law limits the collection of local sales and use tax to no more than 2 percent.
San Antonio, a municipality within Bexar County, has a rate of 1.250%% included in the San Antonio Area Total Tax Rate above.
** Bexar County does not impose a sales and use tax.

Source: Texas Comptroller

Sales Tax Rate Information of Municipalities in Bexar County

For information on sales tax rate of municipalities in Bexar County, click here.

Franchise Tax

Texas levies an annual franchise tax on companies with liability protection, including partnerships, limited partnerships, limited-liability partnerships, professional associations, and business trusts, to name a few. The underlying tax base is on a business’ margin rather than net income or net worth resulting in a primary tax rate of 0.375% for businesses primarily engaged in wholesale or retail activities and 0.75% for all other entities. A taxable entity with annualized total revenue of $20 million or less can elect to compute the “EZ Computation” franchise tax by multiplying total revenue by the apportionment factor and then multiplying the apportioned total revenue by a tax rate of 0.331 percent (.00331).Find out more about franchise taxes at www.window.state.tx.us/taxinfo/franchise/index.html.

Property Taxes

An ad valorem tax, a local property tax, is levied on the real property of individuals, proprietorships and corporations, whether domestic or foreign. Total tax liability is determined by applying tax rates to an appraisal done by the Bexar County Appraisal District, to which all area taxing authorities adhere. In San Antonio, the taxing districts include the city, county, various school districts and several other taxing authorities. To see the 2013/2014 property tax rates, click here.

Some personal property used for businesses is also subject to the same rates, including production machinery and equipment and non-production machinery and equipment. Find out more about property taxes at www.bcad.org.

Unemployment Insurance Tax

The unemployment insurance tax is paid on taxable wages up to $9,000 per employee. Each new employer pays 2.7% or the industry average, whichever is greater. After six calendar quarters, most employers are eligible for a computed tax rate. Find out more about unemployment insurance taxes by visiting www.twc.state.tx.us.