LOCAL INCENTIVES
MEDC & City Council
Local incentives can be discussed prior to action by a government entity but they should not be considered a commitment until the entity takes formal action on the incentive agreement. Typically this requires the approval of the EDC Board and the approval of the City Council. In all cases the company will be required to commit to specific investment levels, a specific time frame in which to make that investment, a minimum estimate of the number of employees that will work in the company on the site within specific time frames and the levels of compensation that will be paid to those employees. Typically all incentives can be confirmed within thirty days or less of the completion of application.
City and County ad valorem tax abatements are available for qualifying investments of $500,000 or more. The abatement term and percentage increase with the size of the investment (building, improvements, and major equipment). Eligible businesses include manufacturers, major wholesale distributors, and residential health care facilities.
Abatements are approved by City Council and Titus County Commissioners under their Tax Abatement Policy. Recipients must meet investment commitments, report values to the Titus County Appraisal District, maintain operations and employment through the abatement period and beyond, and remain current on taxes. Failure to comply may result in cancellation and repayment of abated taxes.
Texas does not have a State Income Tax. For that reason, a large component of taxation to support government services comes to the Cities, Counties, and School Districts from Sales Taxes and from Ad Valorem Taxes. Many communities and School Districts continue to place and Ad Valorem Tax on inventories. Titus County and the Mount Pleasant Independent School District have chosen to not tax “Freeport Goods”. By definition, Freeport Goods are:
. . . goods, wares, merchandise, other tangible property . . . are exempt from ad valorem taxation if: (1) the property is acquired in or imported into this State to be forwarded outside this State . . . (2) the property is detained in this State for assembling, storing, manufacturing, processing, or fabricating purposes . . . ; and (3) the property is transported outside this State not later than 175 days after the date the person acquired or imported the property in this State.
The “Freeport Tax Exemption” can be huge to both manufacturing concerns that ship a large portion of their goods outside the State of Texas and to Distribution operations which cover territories outside the State.
Companies considering a location to Mount Pleasant, within the city limits of the community, may also qualify for “Freeport Exemption” from the city through a “380 Agreement”. In this case, the company would pay the taxes and the city would then reimburse that payment to the company. This agreement may be based on specific criteria including a specified employment number and specific initial investment in real property within the City.
The combination of the County and MPISD Freeport Exemptions along with the 380 Agreement from the City can give you a “Triple Freeport Advantage”. One more reason we say the Mount Pleasant is “One Community With All The Advantages.”
Cash grants are pledged for a new location of a primary industry or for a major expansion of an existing industry. The amount of the grant may be used for a variety of purposes – employee training, to offset cost of construction and/or purchase or relocate equipment.
Grants are offered with a “note payable” which is forgiven when the company completes the specific pledged investment or verifies the hiring of specific number of employees.
Land owned by the Economic Development Corporation may be gifted to a company on the company’s pledge to construct a building of specific size and value and become a primary employer in the City.
The value of the land is included in a note payable, which can then be forgiven upon completion of the agreed-upon improvements and the company's start of daily operations.
The EDC may advertise for employment for a specific classification of jobs as a means to verify to the company that qualified employees reside in the area and are seeking employment.
Employees may be tested for specific skills defined by the employer or screened for knowledge or skills.
The EDC or Northeast Texas Community College may agree to provide specific training in a field of endeavor and may be able to train employees on company owned equipment. Training may be done in conjunction with a new location or expansion. Training may be supplemental to or in addition to that offered by the State or local Workforce Board.
May be coordinated for the company by the EDC at no cost. These services may include:
- Pre-employment Drug Testing by Titus Regional Medical Center
- Real estate searches for Commercial or Residential properties
- Coordination of community tours (housing, schools etc.)
- Detailed analysis of Demographics or Community Markets
- Professional guidance through State Applications/Incentives