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Texas offers various economic development incentives designed to attract and retain businesses within its borders. Among these incentives, Texas 380/381 Agreements and Chapter 312 Agreements stand out for their versatility and potential financial benefits.
Texas 380/381 Agreements: Customized Solutions for Economic Development
Named after the Texas Local Government Code Sections 380 and 381, these agreements enable municipalities (Section 380) and counties (Section 381) to provide grants, loans, and other financial assistance to support economic development projects. The flexibility of Texas 380/381 Agreements means they can be tailored to fit the needs of a wide range of businesses, from startups to large corporations.
The primary benefits of these agreements include:
- Tax Incentives: Businesses can receive sales tax rebates and other tax-related benefits, significantly reducing their overall tax burdens.
- Financial Assistance: Grants and loans are available to help businesses cover costs related to infrastructure development, workforce training, and other essential needs.
- Enhanced Cooperation: By working closely with local governments, businesses can gain additional support and resources that contribute to their growth and success.
- Promotion of Local Economic Activity: These agreements encourage the establishment and expansion of businesses, which in turn stimulate local economies and create job opportunities.
Chapter 312 Agreements: Property Tax Abatements for Growth
Under Chapter 312 of the Texas Tax Code, municipalities and counties can enter into agreements with businesses to abate property taxes on new improvements for up to 10 years. This incentive is especially valuable for companies looking to make significant capital investments in property, such as constructing new facilities or upgrading existing ones.
Key advantages of Chapter 312 Agreements include:
- Long-Term Tax Savings: Property tax abatements can result in substantial savings for businesses over the duration of the agreement.
- Encouragement of Capital Investment: By reducing the financial impact of new investments, these agreements motivate businesses to pursue projects that might otherwise be cost-prohibitive.
- Competitive Edge: The savings realized through property tax abatements can enhance a company's competitive position, allowing it to reinvest those funds into innovation, expansion, and more.
The Role of Alvarez & Marsal Tax in Securing Benefits
Navigating the complexities of these agreements can be challenging. Alvarez & Marsal Tax provides comprehensive support, from identifying eligible opportunities to negotiating terms and ensuring compliance, helping companies maximize these incentives for sustained growth.
With Alvarez & Marsal Tax, businesses can confidently leverage Texas's economic development programs to secure substantial benefits and drive long-term success. To delve deeper into how we can support you, we invite you to contact one of our GTI professionals for a consultation.
Originally published 8 December 2025
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
