Texas/Longview Enterprise Zone Program

Potential benefits include a refund of state sales and use taxes, and a franchise tax reduction. Longview incentives may include tax abatement, regulatory relief, job training services, refunds of local sales and use taxes, utility reductions, and grants provided through Performance Agreements.

For example, a company could realize the following refunds as a result of locating in any one of the three existing Enterprise Zones in the City of Longview.

Refund Matrix

Eligible Purchases Include (Items that are exempt from sales and Use Tax):

• Machinery and equipment utilized in the manufacturing process
   
• Purchases of machinery and equipment, replacement parts, and accessories with a useful life span of more than 6 months
   
• Natural gas and electricity when sold to commercial businesses that are predominately manufacturing

Click the following links to get more information regarding Enterprise Zone:

Enterprise Zone Overview
Enterprise Zone Frequently Asked Questions
Enterprise Zone Longview Map
 

Property Tax Rule 9.105

The Texas Comptroller of Public Accounts offers a refund of state taxes paid by companies owning certain abated property. A company who meets the following three conditions may apply for a refund:

• Paid property taxes to a school district on property that is located in a reinvestment zone.
   
• Is exempt in whole or in part from property tax imposed by a city of county under a tax abatement agreement.
   
• Is not a tax abatement agreement with a school district. The refund is equal to the amount of property taxes that would have been paid had the company entered into a school district abatement agreement with terms identical to the city or county abatement agreement, not to exceed the net state sales and use taxes and state franchise taxes paid or collected during that calendar year.

Reinvestment Zone

A Reinvestment Zone is a local economic development tool used to stimulate local economies. Longview established a Reinvestment Zone for the purpose of granting local businesses ad valorem property tax abatements for up to 10 years.

In Longview, the owner or lessee of eligible property requesting tax abatement shall, agree to expend a designated sum of money and provide a certain number of jobs or annual payroll as further defined below.

Tax abatement may be made available to industrial, manufacturing, distribution and service businesses located anywhere within Longview’s city limits or extra territorial jurisdiction (ETJ) based on the following:

• To be eligible for a tax abatement there must be a minimum capital investment of $100,000.00 and at least ten (10) new full time jobs to the labor force.
• If a business is located or will locate within an Enterprise Zone, an Additional 10-20% abatement may be available as individually negotiated, with total abatement not to exceed 100%

Foreign Trade Zone at the East Texas Regional Airport

A Foreign Trade Zone (FTZ) is a site within the United States, in or near a U.S. Customs port of entry, where foreign and domestic merchandise is generally considered to be in international commerce. Foreign and domestic merchandise may enter this zone without a formal Customs entry or the payment of Customs duties or government excise taxes.

Merchandise entering the Zone may be:

If the final product which has been handled or manufactured within the FTZ, and is re-exported from the United States, no U.S. Customs duty or excise tax is levied. If, however, the final product is imported into the United States, Customs duty and excise taxes are due only at the time of transfer from the FTZ and formal entry into the United States.

Free Port Exemption

A key component of Longview’s incentive program includes Harrison County’s Free Port Exemption. This incentive provides exemptions for certain types of inventory from ad valorem taxation if it has been determined to be in the state for 175 days or less.

Sales and Use Tax Exemptions

   Manufacturing Machinery and Equipment:

• Leased or purchased machinery, equipment, replacement parts, and accessories that have a useful life of more than 6 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. Texas businesses are exempt from paying state sales and use tax on labor for constructing new facilities.

   Clean Rooms

• Clean rooms used in the production of semi-conductor components are exempt from State Sales and Use Taxes as manufacturing equipment. That includes property affixed to or incorporated into realty, including integrated systems, fixtures, lighting, moveable partitions, piping and all property necessary or adapted to reduce contamination or to control airflow, temperature and humidity.

   Natural Gas and Electricity

• Texas companies are exempt from paying state sales and use tax on electricity and natural gas and in manufacturing, processing, or fabricating tangible personal property.

Ad Valorem/Property Tax Exemption

A Texas constitutional amendment providing an exemption from property taxation for pollution control was approved in 1993.

Tax Increment Financing

The costs of improvements to an area are repaid by the contribution of future tax revenues. A city can initiate this form of financing.

Tax Increment Reinvestment Zone (TIRZ)

This is an economic development tool available to Texas cities to promote both new development and redevelopment within a specific geographic area inside the corporate city limits.

Click link to open a map showing Longview's TIRZ.

Longview, TX Tax Increment Reinvestment Zone Map

Brimer Legislation or HB 1200

This legislation provides relief from school property taxes for large capital investments. The bill works by capping the appraised value of capital investments that qualify based on a sliding scale tied to the total property wealth of the school district where the investment is made. The scale ranges from a cap of $20 million to $100 million based on the school district’s property valuation.

The investment amount is determined over a two-year period. Generally, a school district may abate 100% of the appraised value over the applicable cap of land, improvements, and tangible personal property used in manufacturing for up to 8 years, beginning in the third year of the investment. During the first two years of the project, a company pays taxes on the full-appraised value, but it is entitled to a refund of any amounts paid in the first two years on appraised value in excess of the applicable cap.