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LOCAL INCENTIVES

 The Wichita Falls Economic Development Corporation (WFEDC) owns the first-class, 535-acre Wichita Falls Business Park.

This park has all infrastructure in place – water, sewer, storm sewer, electric, gas, and fiber – and can greatly reduce the price of land for tenants creating new jobs.

The asking price of the land is 75 cents per square foot and we have discounted the land to 35 cents per square foot for some.  The WFEDC owns other property in Wichita Falls and could reduce the price of these parcels, as well.

The WFEDC currently owns two industrial buildings –  171,000 square feet and 141,000 square feet – and would discount the price of these facilities for any company creating 100 or more new jobs.

The WFEDC could also structure a favorable lease whereby lease rates in the first few years of operation would be at a reduced or $0 cost, with lease rates ramping up over a period of time, thus assisting a company with critical cash flow in the first few critical years of operation.

In 1998, the voters of Wichita Falls approved a ¼ cent economic development sales tax. The City generates approximately $4 million annually and this revenue can be used to attract new or assist expanding local businesses which meet certain state-mandated requirements.  The amount of funds a company may receive is based on the number of new jobs being created, the wages of the new jobs being created, and the investment created, usually between $500 for a minimum wage position up to $15,000 or more for executive level positions.  Since 1998, the WFEDC has approved $69 million for 81 projects.  Funds may be used individually or collectively in the three ways stated below:

Cash for Jobs – Create a new job in Wichita Falls and retain that job for at least six months, and the WFEDC will write your company a check. Each new position must be filled by one or more employees for a total period of not less than six months before your company may petition the WFEDC for payment.  If your Company elects to use incentives outlined in b. and c. below, the amount paid per employee would be proportionately less.

Forgivable Loan – For creditworthy, well-established companies, the WFEDC can provide forgivable loans for companies who create and then maintain new positions. Typically, the WFEDC has financed machinery and equipment contingent on acquiring a first lien position or purchase money security interest on said equipment. The term of the loan is based on the depreciable life of the equipment being financed.  For each and every year the “Client” creates and then maintains the number of new positions as mutually agreed, the debt service for that particular year is forgiven.  Should the “Client” fail to maintain the number of new positions as mutually agreed, the company would pay back a portion of the loan.  A financial review of the company would be a prerequisite to be considered for this incentive.

Training – The WFEDC can provide funding to assist with employee training. The amount per position would be negotiated based on the training needs.  “Company” usually pays for the training and then petitions the WFEDC for reimbursement. “Company” would be required to provide supporting documentation on said training prior to being reimbursed by the WFEDC.

 

The three potential incentives above are contingent upon a recommendation from the Wichita Falls Economic Development Corporation (WFEDC) to the Wichita Falls City Council and subsequent approval by the City Council.  If approved by the WFEDC and City Council, a Performance Agreement would be prepared to state all terms and conditions for the three incentives above.

Companies are eligible for a 100% exemption from Ad Valorem taxes (City, County, and School) on inventory that leaves the State of Texas within 175 days of arrival.  This incentive requires no prior approval and is in effect as long as the company has qualifying inventory.

Should a company locate and own a facility outside of the city limits of Wichita Falls, the company would not be eligible for a real property tax abatement from the City, but the City could enter into a non-annexation agreement with the company to provide water, sewer, fire and police protection, and landfill access.

In return for providing a company with these public services, the City and company would negotiate a non-annexation agreement, resulting in a “Payment in Lieu of Taxes” (PILOT).  This payment would be substantially below the real and personal property taxes that would be paid if a company located a facility within the City limits.

The tax liability to the City in the first five years following start-up would be 25% of what would be owed if the project were located within the City limits.  The tax liability for years six through ten would be 40%.  At the end of ten years, the Company may be able to negotiate another ten-year non-annexation agreement.

The non-annexation agreement would not affect the personal property tax abatement stated above.  This incentive would require the approval of the City of Wichita Falls.

Should a company build a new facility in the City of Wichita Falls, the company is  eligible for a ten-year property tax abatement, whereby 100% of real and personal property taxes will be abated in the first year, 90% in the second year, and a 10% reduction in the abatement each year until year ten when the abatement will be 0%.

This incentive saves companies 55% on real and personal property taxes over the ten-year life of the abatement.

Should a company buy an existing facility here, only the incremental value of any improvements would be subject to the real property tax abatement, but new machinery and equipment would all still qualify for the ten-year abatement described above.

Any tax abatement for machinery and equipment must be approved before the equipment is brought into the city and put into use.

Texas sales and use tax (8.25%) exempts tangible personal property that makes a chemical or physical change in the product being manufactured or is necessary and essential in the manufacturing process.

Other states under consideration a project may charge sales and use tax for manufacturing equipment.

STATE INCENTIVES

Texas Enterprise Fund

The Texas Enterprise Fund is the largest “deal-closing” fund of its kind in the nation. The fund is used as a final incentive tool for projects that offer significant projected job creation and capital investment and where a single Texas site is competing with another viable out-of-state option.
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The Freeport and Goods in Transit Exemptions

Section 11.251 of the Tax Code provides for a freeport exemption applying to goods, wares, ores and merchandise other than oil, gas and petroleum products (defined as liquid and gaseous materials immediately derived from refining petroleum or natural gas) and to aircraft or repair parts used by a certificated air carrier. The freeport goods qualify if they leave Texas within 175 days from the date they are brought into or acquired in the state.
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Texas Enterprise Zone

Under the Texas Enterprise Zone Program, the city of Wichita Falls can adopt a company as a Qualified Business and thereby request that the State of Texas grant that company Enterprise Project status. Once the project has been so designated by the state, the project is eligible for a refund of state sales and use tax.
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Product Development and Small Business Incubator Fund

Offers long-term, asset-backed loans to near-bankable businesses commercializing new or improved products and small businesses or entities which foster growth of small businesses. The program targets those businesses which may be unable to obtain full financing or financing on workable terms in traditional capital markets.
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Skills Development Fund

The Chamber and Vernon College partner to assist an existing primary employer or a new employer with the evaluation and packaging of state and federal training programs. The State’s Skills Development Fund program has been remarkably successful in Wichita Falls.
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SALES TAX

Sales tax: 6.25% to state and 2% to the city.
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PROPERTY TAX

The City’s property tax rate on real property is $.072988 per $100 of assessed value
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