Taxes & Incentives
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 and / or investment thresholds are reached.
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
A company may choose to locate in a Foreign Trade Zone (FTZ) for reduction of duties levied on domestic and foreign goods. Through the use of the FTZ, companies can structure their import and export operations to pay the lowest possible custom duties. For the community, the Zone is a means to stimulate the local economy by expanding trade and increasing employment, particularly in manufacturing and goods handling industries. San Antonio has 10 general-purpose FTZ sites. For detailed information on incentives offered within an FTZ, visit www.freetradealliance.org.
To view the Foreign Trade Zone map, click here.
If the general-purpose sites do not fully meet the company’s requirements, an application for subzone designation is available. Subzone sites are areas that are physically separate from the general purpose site, but are legally and administratively attached. Subzones typically accommodate existing facilities that cannot be located on the general-purpose site. Subzones offer all of the advantages of a Foreign Trade Zone. For more information about Subzone Designation, visit www.freetradealliance.org.
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.
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
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.
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.
Single Point of Contact
The City of San Antonio provides an overview of the site development process. This team facilitates the process by serving as the direct, immediate line to key decision-makers that can troubleshoot and resolve problems encountered in the development and permitting process, such as issues related to local subdivision, uniform building, and the uniform fire codes.
The Single Point of Contact (SPOC) describes the development process, identifies applicable codes, regulations and clarifies code requirements. This courtesy briefing and conceptual plans review does not replace regular construction processes.
The briefings are tailored to the scope of the development and may require the participation of the following entities:
- Development Services Department
- Public Works Department
- CPS Energy (electric/gas)
- San Antonio Water System (SAWS)
- Police Department
- Health Department
- Other departments to meet businesses’ needs
Bexar County Incentives
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.
Texas Enterprise Fund
Texas Enterprise Fund
The 78th Texas Legislature established the Texas Enterprise Fund (TEF) in 2003 to provide financial resources to help strengthen the state’s economy. The Texas Enterprise Fund, the largest “deal-closing” fund of its kind in the nation, continues to attract businesses and jobs to Texas. The TEF can be used for a variety of economic development projects, including infrastructure development, community development, job training programs and business incentives.
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 the TEF, clickhere.
Skills Development Fund
The Skills Development Fund is Texas’ premier job-training program providing training dollars for Texas businesses and workers. Administered by the Texas Workforce Commission, success is achieved through collaboration among businesses, public Community and Technical colleges, Local Workforce Development Boards and economic development partners. Learn more about the Skills Development Fund.
Skills Development Fund
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.
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.
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.
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.
|Sales & Use Tax Rate for the City of San Antonio in the County of Bexar|
|San Antonio MTA Metropolitan Transit Authority||.500%|
|San Antonio ATD Advanced Transportation District||.250%|
|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
No State Personal Income Tax
Texas levies no individual income taxes, joining six other states with the same policy. In addition to collecting no personal income taxes, the state collects no corporate income taxes.
No Unitary Tax
Businesses and individuals find the Texas system extremely favorable. In addition to paying no personal income tax or state property taxes, there is no unitary tax. For more information about Texas’ tax climate, click here.
Texas Sales and Use Tax
A sales tax is imposed on all retail sales, leases and rentals of most goods, as well as taxable services. The use tax is a tax on the storage, use or consumption within the state of Texas of taxable items purchased, leased or rented on which the Texas sales tax has not been paid. The use tax is applicable to taxable items purchased out-of-state and later used in Texas, and to any taxable merchandise or inventory purchased tax-free for resale which was converted to personal use. The state tax of 6.25% and any applicable local tax are due for the reporting period in which the item was converted to personal use. For more information about sales and use tax rates, visit the Texas Comptroller website at www.window.state.tx.us/taxinfo/sales.
Texas Sales and Use Tax Exemptions
Texas businesses are exempt from paying state sales tax and use tax on labor for constructing new facilities.
Other exceptions include tangible personal property which becomes a component part of a manufactured product or will be consumed in processing; sales delivered out-of-state; sales for resale; and a number of other selected items, including grocery food products and prescription medicines. Electricity and gas are exempt from sales tax if more than 50% of such energy is consumed in the manufacturing process.
Manufacturing equipment is exempt from sales tax. This exemption is applicable to any new and/or used equipment (including replacement parts with a life span of six months or more), whether purchased in or out-of-state. This exemption also applies to manufacturer’s pollution control equipment. For more information about Texas sales and use tax exemptions, visit the Texas Comptroller website at www.window.state.tx.us.
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 1%. However, trade businesses engaged primarily in wholesale or retail activities would pay 0.5% in recognition of the low profit margins basis to the industry. Find out more about franchise taxes at www.window.state.tx.us/taxinfo/franchise/index.htm...
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 2016 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.