economyEconomic Development

Property Owner Tax Credits

For applications determined to be complete before Jan. 1, 2014, a property owner may receive a property tax credit for part of the maintenance and operations taxes paid to the school district for each complete tax year during the qualifying time period. The tax credit is an amount equal to the maintenance and operations levy during the first two complete tax years of the qualifying time period on the taxable value exceeding the limitation amount (even though the limitation does not take effect until the end of the qualifying time period, generally the third year).

Tax Credit Application Process

To be eligible for a tax credit, the owner must submit an application for tax credit to the school district to which the property taxes were paid. Applications for the tax credit may be filed any time after property taxes are finally paid for the last complete tax year of the qualifying time period. The owner must:

  • file a completed Form 50-300, Application for Tax Credit on Qualified Property (PDF) or an alternative form that is authorized.
  • attach tax receipts from the school tax collector that show full payment of school district property taxes on the qualified property for the applicable qualifying time period;
  • include any other document or information that the Comptroller or the school district considers necessary for determining the applicant's eligibility for the tax credit or the amount of the tax credit.

The school district determines the owner's eligibility for a tax credit. If a school district determines that the owner is eligible for a tax credit and verifies the total tax credit, then the school district shall direct its tax collector to apply the tax credit against any taxes that the school district imposes on the qualified property as follows:

  • apply one-seventh of the total tax credit for seven tax years beginning with the tax year that follows the tax year in which the application for tax credit was approved, and for six tax years thereafter;
  • the maximum amount of tax credit that may be applied in each of the seven tax years may not exceed 50 percent of the total amount of school property taxes (maintenance and operations and debt service) imposed on the qualified property in that tax year;
  • apply any tax credit that remains as a result of the application of the cap that is imposed by (B) above in the first three tax years that begin on or after the date on which the owner's eligibility for the appraised value limitation expires, but the maximum amount may not exceed the total amount of school property taxes imposed on the qualified property in each tax year. Any remaining tax credit that is not used expires

No tax credit will be allowed for either the tax year in which the owner relocates the business outside the school district or the tax years thereafter.

If the Comptroller and a school district determine that a person who received a tax credit was either not eligible for the credit or received more credit than the person was entitled, then the school district shall impose an additional tax on the qualified property that is equal to the amount of tax credit that was erroneously taken, plus interest at an annual rate of 7 percent, calculated from the date on which the credit was issued.

A tax lien attaches to the qualified property in favor of the school district to secure payment of any additional tax and interest that are imposed and any penalties incurred. A person who is delinquent in the payment of an additional tax may not submit a subsequent application or receive a tax credit in a subsequent year.

School District Reimbursement Application for Tax Credit

After a school board approves a tax credit for a particular project, the school district subsequently files an application annually with the Texas Education Agency for reimbursement from the state for the tax credit the school district has approved and granted.

See the Texas Education Agency's webpage on Additional State Aid for Ad Valorem Tax Credit.

Download TEA's Request for Additional State Aid for Ad Valorem Tax Credit (PDF).

The deadline for submitting a Request for Additional State Aid for Ad Valorem Tax Credit application is on or before May 31 each year for which the tax credit is due.

Need Help?

For additional information, contact the Data Analysis and Transparency Division via email or at 800-531-5441, ext. 3-4679, or 512-463-4679.

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.