Texas Enterprise Zone Program

The Texas Enterprise Zone Program (EZP) is a state sales and use tax refund program designed to encourage private investment and job creation in economically distressed areas of the state. Local communities must nominate a business for enterprise project designation in order to be considered to receive state sales and use tax refunds on qualified expenditures. An enterprise project is eligible for a refund of the taxes imposed by the Texas Tax Code on all taxable items purchased for use at the qualified business site related to the project or activity during the designation period.

Companies must contribute information on the application packet, meet minimum capital investment thresholds and create and/or retain jobs that employ a certain percentage of economically disadvantaged individuals, enterprise zone residents or veterans. The amount of refund is related to the capital investment and jobs created at a qualified business site. 

Eligibility Details

  1. Jobs counted for benefit must have an average weekly wage which meets or exceeds the average county weekly wage in the county which the qualified business site is located.
  2. Each community has a limited number of designations available per biennium; communities with a population at or above 250,000 have 9 designations available per biennium, while communities with a population of less than 250,000 have 6 designations available. 
  3. Employment (new and retained jobs) and capital investment commitments must be met prior to the expiration of the designation period.
  4. A company must first pay the applicable state sales and use tax on qualified expenditures in order to receive a refund of those taxes.
  5. Only full-time jobs qualify for EZP award consideration.
  6. Jobs must be maintained through the end of the designation period, or for at least 3 years after the date on which tax benefits are received, whichever is later.
  7. The percentage of a project’s new employees who must meet economically disadvantaged, enterprise zone residency, or veteran requirement varies depending on whether the qualified business site is located inside or outside of an Enterprise Zone—state-designated area with economically depressed conditions.
  • If located within a Zone, 25% of the company’s new employees at the qualified business site must meet economically disadvantaged, enterprise zone residency or veteran requirements.
  • If located outside a Zone, 35% of the company’s new employees at the qualified business site must meet economically disadvantaged, enterprise zone residency, or veteran requirements.

Project

Level of Capital Investment

Maximum Number of Jobs Allocated

Maximum Potential Refund

Maximum Refund Per Job Allocated

Half Enterprise

$40,000-$399,999
$400,000-$999,999
$1,000,000-$4,999,999
$5,000,000 or more

10
25
125
250

$25,000
$62,500
$312,500
$625,000

$2,500
$2,500
$2,500
$2,500

Enterprise

$5,000,000-$149,999,999

500

$1,250,000

$2,500

Double Jumbo

$150,000,000-$249,999,999

500*

$2,500,000

$5,000

Triple Jumbo

$250,000,000 or more

500*

$3,750,000

$7,500

*Double and Triple Jump Projects may not count retained jobs for benefit. A Triple Jumbo Project must create at least 500 jobs.