Property Tax Economic Development Programs

Economic Development Refund

Sections 111.301-111.304, Tax Code

Sections 111.301 to 111.304 of the Tax Code provide for state tax refunds to qualified property owners who entered into property tax abatement agreements after Jan. 1, 1996, with a city or county, but not a school district. Property owners with tax abatement agreements entered into on or before Jan. 1, 1996, are not eligible for these state refunds. They are also not eligible if their property is subject to an appraised value limitation.

To be eligible for a refund, a property owner must have established a new business in a reinvestment zone or expanded or modernized an existing business located in the zone. Since entering into a city or county abatement agreement, the property owner must have increased the business’s payroll by at least $3 million, specific to its property in Texas. Or, the owner must have increased the abated property’s appraised value by at least $4 million.

Property owners must submit a refund application to the Comptroller’s office before Aug. 1 of the year following the property tax year. A property owner’s potential refund equals the school property taxes paid by the owner in that tax year. The maximum refund is the lesser of the school taxes paid or the amount of net sales and use tax and net franchise tax paid for the tax year. The total for all refunds collectively may not exceed $10 million.
View Application Form AP-186 (PDF)

More Resources:

• Texas Tax Code §111.301 Refund of State Taxes; Application for Refund
• Texas Administrative Code Rule §9.17 Notice of Public Hearing on Tax Increase
• Biennial Reports of Reinvestment Zone for Tax Abatement Registry, Tax Abatement Agreement Registry, Tax Increment Financing Zone Registry and Refund for Economic Development
• For additional information, view the report section on Economic Development Refund in An Analysis of Texas Economic Development Incentives 2010.