Austin-Uvalde County was included this week in a list of 224 counties released by Texas Comptroller Carole Keeton Rylander where businesses can apply for hundreds of millions of dollars in state tax breaks next year. The franchise tax credits for economic development were enacted in 1999 by the 76th Legislature and include a research credit, a job creation credit and an investment credit. " All three tax credits are real and businesses large and small will benefit," Rylander said. "The total dollar amount of the tax breaks will depend on how many businesses take advantage of this tremendous tax credit program."
The research credit is available to firms that perform qualified research in Texas. It is based on the firm's annual increase in research activities during the prior year. Four percent of qualified research expenses will be credited for tax reports due through the end of 2001. That credit will increase to five percent for tax reports due in 2002 and after.
Companies that create jobs in selected counties may qualify for a job credit equal to 25 percent of the wages paid to new hires in their first year of employment. To qualify, a corporation must create at least 10 jobs, pay at least 110 percent of the county's average weekly wage, pay health benefits and be engaged in manufacturing, warehousing, wholesale distribution, computer services or research. The credit is limited to 50 percent of the firm's tax liability in the year that credits are claimed. Unclaimed credits may be carried over for a maximum of five years.
Corporations that invest at least $500,000 in machinery and equipment can qualify for a franchise tax credit equal to 7.5 percent of that investment. This investment credit, too, is limited to 50 percent of the firm's tax liability.
The strategic investment area is a collection of counties and sub-county areas where job creation, investment and research activities by businesses can lead to franchise tax credits. The SIA is determined each September by the Comptroller's Office, and the determination is effective for business activity in the following calendar year. Comptroller Rylander determined that of the state's 254 total counties, 224 fall wholly or partially in the state SIA for calendar year 2001. Of those counties, 114 qualify for full-purpose SIA designation based on their relative unemployment rate and per-capita income. This designation will permit firms engaged in manufacturing, warehousing, wholesale distribution, computer services or research to apply for job creation and investment credits, as well as the research credit bonus.
Source: Uvalde Leader News
