Value-Added Property Tax Abatement
In 1981, the Texas Legislature passed the Property Redevelopment and Tax Abatement Act (found in Chapter 312 of the Texas Tax Code) which allows tax abatements to be offered to companies locating in the State of Texas.
The taxing entities have developed and implemented a very aggressive value-added tax abatement program and have passed qualifying guidelines pertaining to the companies under consideration for tax abatement. Value-added improvements to real property may qualify for tax abatement in Fort Bend County, Harris County and Waller County. Tax abatements may be granted for up to ten years and up to 100% during each year of abatement. Each abatement is determined on the individual merits of the project under consideration.
Facilities that Quality for Abatement:
Manufacturing operations, wholesale distribution projects, major office operations, and in some cases, recreational uses that serve a regional population.
Taxes on new buildings, equipment used in the production process, and build-out of an existing facility that has a productive life of at least ten years.
Taxes on land, existing buildings, inventory, deferred maintenance of an existing building, and rolling stock.
Qualifications for Tax Abatement:
In order to quality for abatement consideration, the project must be expected to have an increased appraised ad valorem value of the minimum amounts as set forth by each of the following entities:
Fort Bend County $1,000,000
Harris County $1,000,000
Waller County $ 500,000
The Application Process:
The Katy Area Chamber of Commerce provides inquiring companies with the Application for Value-Added Tax Abatement. This questionnaire is used to determine the value of the project, value of inventories, the amount of new jogs to be creat4ed, payrolls, etc. An economic impact statement is prepared and submitted to appropriate taxing entities for recommendation of terms and percentages of abatement.