Rural Programs

Local Tax Programs

Type A and B Economic Development Corporations

Manufacturing equipmentThe sales tax for economic development is one of the most popular and effective tools used by rural cities to promote economic development. Type A EDCs are typically created to fund industrial development projects, such as business infrastructure, manufacturing and research and development. Type B EDCs can fund all projects eligible for Type A, as well as parks, museums, sports facilities and affordable housing. Type A and B program details »

Municipal Development Districts

Municipal management districts (MDD) allow rural cities to impose a special dedicated sales tax to fund cultural, recreational and economic development projects similar to those authorized for Type B Economic Development Corporations.

One of the biggest advantages of an MDD is the flexibility for establishing the district’s boundaries. The MDD is the only municipal sales tax that can be imposed in a city’s extraterritorial jurisdiction (ETJ). A Type B tax applies only within municipal limits; an MDD may include some or all of the city, a combination of city and its ETJ, or all or part of only the ETJ. MDD program details »

Event Trust Fund

Texas’ event trust fund programs help its communities offset the costs of hosting sporting and non-athletic events. To qualify for these funds, an event must be competitively bid, and the community must be competing with cities outside Texas for the right to host it. Event Trust Fund program details »

Chapter 311 Tax Increment Financing

Tax increment financing is a tool that rural communities can use to publicly finance needed structural improvements and enhanced infrastructure within a defined area known as a reinvestment zone. Chapter 311 program details »

Chapter 312 Tax Abatements

Rural communities can use tax abatements to attract new industry and commercial enterprises and to encourage the retention and development of existing businesses. Tax abatement is an agreement between a taxpayer and a taxing unit that exempts all or part of the increase in the value of the real property and/or tangible personal property from taxation. Chapter 312 program details »

Chapter 313 Texas Economic Development Act

An appraised value limitation is an agreement in which a taxpayer agrees to build or install property and create jobs in exchange for an eight-year limitation on the taxable property value for school district maintenance and operations tax (M&O) purposes and a tax credit. Chapter 313 program details »

Chapter 380/381 Agreements

These agreements authorize rural municipalities and counties to offer incentives designed to promote economic development such as commercial and retail projects.  Specifically, it provides for offering loans and grants of local government funds or services at little or no cost to promote state and local economic development and to stimulate business and commercial activity. Chapter 380/381 program details »

Hotel Occupancy Tax

Rural communities can utilize hotel occupancy tax as a way to encourage tourism and economic development. Hotel occupancy tax is a tax is imposed on a person who pays for a room or space in a hotel costing $15 or more each day. Local hotel taxes apply to sleeping rooms costing $2 or more each day. Hotel Tax details on Window on State Government website »