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KEEP CHAPTER 312
Chapter 312 of our tax code provides temporary property tax exemptions that create thousands of jobs – without raising taxes for anyone else.
The legislature must renew Chapter 312 for Texas to remain competitive.
Without Chapter 312, Texas will lose jobs to other states.
WHAT IS CHAPTER 312?
Chapter 312 of the Tax Code allows cities, counties, and special districts to offer a temporary property tax exemption to a new investment project. These temporary exemptions have successfully attracted new projects to Texas without raising taxes on existing property and led to thousands of new manufacturing jobs — with more jobs coming in the next few years, helping to create a booming economy.
Chapter 312 is set to expire and must be renewed by the legislature during the 2019 legislative session for Texas to remain competitive with other states. Other states offer these incentives. Texas will lose its competitive edge in attracting investments without Chapter 312.
WHY DOES TEXAS NEED CHAPTER 312?
Almost every other state offers similar exemptions, even though their property taxes are much, much lower than those in Texas. Texas property taxes on industrial projects are the 4th highest of any state – 65% higher than the national average.
High property taxes create a huge barrier to new investment, particularly capital-intensive investments like manufacturing plants. If Chapter 312 is allowed to expire, Texas will lose major projects and jobs to other states. The continuation of Chapter 312 is imperative for Texas to attract investment and stay competitive.
HOW DOES CHAPTER 312 WORK?
Chapter 312 exemptions are temporary and are limited to the initial years of a facilities operations – no more than 10 years. When the exemption period is over, the exempt property goes onto the local tax rolls at its full value, growing the local government’s tax base and generating funds for road improvements and new schools.
When considering a Chapter 312 application, a taxing unit must provide advance public notice and a posted public meeting.
Chapter 312 has been used by Texas local governments to bring or encourage the expansion of businesses such as Toyota, Facebook, Texas Instruments and Blue Bell Ice Cream, creating thousands of jobs and millions of dollars in local economic revenue.
CHAPTER 312 DOES NOT INCREASE TAXES ON OTHER PROPERTIES.
Chapter 312 applies only to NEW investment and cannot be used to exempt existing facilities. Chapter 312 can only ADD to local tax bases. The temporary property tax reduction on a new property does not increase property taxes on other properties. There will be no cost to the state to renew Chapter 312 – in fact, the state gains from the sales, franchise, and other taxes the new projects pay.