Companies that report 20 percent or more of their revenue coming from retail sales are not eligible for a CAPCO investment. The Comptroller’s office will use the state sales and use tax form to determine whether a prospective investment meets this requirement.
The statute requires an annual CAPCO review for the preceding calendar year. You may request a letter certifying the benchmark only after your audit is complete. If you reach an investment benchmark with an investment in 2008, the audit for that investment would not occur until 2009.
For Program One, tax credits may be taken in 2009 for tax year 2008. For Program Two, the credits may be taken in 2013 for tax year 2012.
The CAPCO Program is an economic development program designed to encourage investments in small companies in various industries and create jobs for Texans.
Becoming a CAPCO can be a difficult and time-consuming process. Many requirements are outlined in state law. These include:
A strategic investment area is an area of Texas qualifying at the time of investment as a Strategic Investment Area (SIA) under Texas Tax Code Chapter 171, Subchapter O, or after the expiration of that subchapter, an area qualified as an SIA under that subchapter immediately before its expiration. Essentially, an SIA is a rural, low-income Texas county. See which counties qualify as Strategic Investment Areas.
“Low-income community” has the meaning assigned by the Internal Revenue Code of 1986, 45D(e). These communities are designated as low-income according to their zip codes.