Value Limitation and Tax Credits (Ch. 313 School District Tax)

Category: TX State Programs

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:

• a 10-year limitation on the taxable property value for school district maintenance and operations tax (M&O) purposes.

The minimum limitation value varies by school district.

The application for a limitation on the appraised value for M&O purposes is submitted directly to the school district and requires an application fee that is established by each school district.

Tax credits applicable only to applications determined to be complete prior to 01/01/2014. To qualify for a tax credit, a separate application must be submitted to the school district after property taxes for the last complete year of the qualifying time period are paid. The credit is for the M&O taxes paid in excess of the limitation amount in each complete year of the qualifying time period.

The school district's tax collector must credit the overage in equal parts over the last seven years of the agreement, but the credit in each year may not exceed 50 percent of the total taxes paid on the qualified property during that year. Any eligible amount not credited during the seven-year period are to be credited over the following three years, but the amount credited in each year may not exceed the total taxes paid on the qualified property in that year.

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Disclaimer

This information should not be construed as, and is not a substitute for, legal advice.

Property owners and school districts are urged to consult the Attorney General's Economic Development Handbook and their own legal counsel for any questions or interpretations of economic development laws.