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If you have a proposed area,
it must meet certain size and distress criteria, reflect the economic
objectives of the community, and specify local incentives that may be
offered to a business in the zone. Zone designation is effective for
a period of 7 years. The size and distress criteria are as follows:
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- Must have a continuous boundary, be at least 1 square unit mile,
and may be up to the larger of 10 square miles or 5% of the
applications jurisdiction; but not greater than 20 square miles,
excluding waterways and transportation arteries;
- Must have an unemployment rate of at least 1.5 times the state
average unemployment rate for the preceding 12 months; or have had
a population loss of 12% during the most recent 6 years, or 4% during
the most recent 3 years;
- Must meet at least one other distress factor, including poverty,
deteriorating structures, tax arrearages, low income, substantial loss
of business or jobs, declaration as a state or federal disaster area
or a substantial increase in juvenile crime.
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Business located in an
enterprise zone may be eligible for local and / or state benefits.
To be eligible for state benefits, a business must be nominated by
the jurisdiction that created the zone and be designated by Texas
Department of Economic Development as an Enterprise Project.
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To obtain benefits as a
qualified business, the business must be active in the zone. At
least 25% of the new positions must be occupied by persons that
are residents of any zone within the city or county's jurisdiction
or economically disadvantaged as defined by state or law for at
least the five-year designation period.
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An Enterprise Zone Project,
may be eligible for the following State incentives:
- Refunds of state sales and use taxes paid for building materials
and machinery and equipment of $2,000 per employee up to $250,000 per
year. This amount, and refunds on subsequent purchases, may be carried
over throughout the five-year period of project designation but not
beyond the designation period;
- Corporate franchise tax reductions based-upon on either taxable
capital or earned surplus.
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State and local incentives are provided
to encourage private investment in the zone. At the State level, Qualified
Businesses as designated by the State are eligible for:
- A one-time refund of sales and use tax of $500 per qualified employee
up to a limit of $5,000 on qualified purchases of machinery and equipment;
- A one-time refund of $500 per qualified employee up to a limit of $5,000
on corporate franchise tax.
Local incentives, such as refunds of local
sale tax, property tax abatements, and streamlined permitting may also be provided.
The decision to provide incentives to firms must be approved by the governing bodies
in which the zone lies and is based upon the job creation potential of that firm.
(Source: City of El Paso, Department of Economic Development)
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