economyEconomic Development

Texas Economic Development ActTax Code Chapter 313

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

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 is credited over the following three years, but the amount credited each year may not exceed the taxes paid.

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