Jump To:


Property Taxes

Local Ad Valorem Property Taxes

All real and personal property owned by companies doing business in El Paso is subject to payment of ad valorem property taxes. The tax rates provided below are based on 100 percent assessed valuation and are expressed per $100 of value.

All facilities located within the municipal boundaries of El Paso are subject to property-tax levies from a total of five taxing entities: the city of El Paso, El Paso County, University Medical Center, El Paso Community College, and one of four school districts. See the table below for details.

 

Property Tax Structure for Entities in El Paso County (FY 2013)

 

$/$100

City of El Paso

0.678378

El Paso County

0.433125

University Medical Center

0.214393

El Paso Community College

0.124359

 

School Districts in El Paso County

$/$100

El Paso Independent School District

1.235000

Ysleta Independent School District

1.360000

Socorro Independent School District

1.274794

Canutillo Independent School District

1.490000

Fabens Independent School District*

1.261900

Anthony Independent School District*

1.198200

San Elizario Independent School District*

1.160756

Tornillo Independent School District*

1.303700

Clint Independent School District*

1.335050

*These school districts fall within the county of El Paso, but outside the city of El Paso.

Source: Year 2013 Taxing Entities & Rates. City of El Paso, Texas.
Updated: January 2014.
 

 

The following list provides the total "ad valorem" property tax rate for businesses which may locate within the four school districts found in the City of El Paso limits.

  • El Paso......................................2.685255
  • Ysleta........................................2.810255
  • Socorro......................................2.725049
  • Canutillo.....................................2.940255
 

Print View

Back to top ↑


Sales / Use Tax

There is no personal income tax levied in the state of Texas. Click here for El Paso Central Appraisal District exemption listing and Tax information..

 

Sales and Use Taxes for El Paso County

Tax

Rate

State Sales Tax

6.25%

Municipal — City of El Paso

1.00%

County — El Paso County

0.50%

Municipal Transit — Sun City Area Transit Tax

0.50%

Total El Paso Sales and Use Tax

8.25%

Source: Susan Combs, Texas Comptroller of Public Affairs (2011).

 

Print View

Back to top ↑


The Texas Margin Tax

As a general statement, any legal entity that does business in Texas and is organized to have some form of limited liability protection must pay the Texas Margin Tax.

The Texas Margin Tax Rate is .5 percent for taxable entities primarily engaged in retail or wholesale trade, and 1 percent for all other taxable entities. The Texas Margin Tax is based on a percentage of the taxable margin, which is the lesser of ...

  • Total revenue minus cost of goods sold
  • Total revenue minus employee compensation and benefits
  • 70 percent of total revenue

The taxable margin is then apportioned by the percentage of the entity’s business conducted in the state of Texas. This percentage is calculated by dividing gross receipts from business conducted in the state of Texas by gross receipts from total business conducted. The Texas Margin Tax Rate is then applied to the apportioned taxable margin. Please click on the following link for the Texas Margin Tax Calculator: www.window.state.tx.us/taxinfo/taxforms/HB3Calc.pdf.

 

Print View

Back to top ↑


Local Incentives

380/381 Municipal Grant and 381 County Grant

The city of El Paso and El Paso County provide incentives to selected private businesses that will make a measurable difference in achieving economic growth and development in the community. These programs provide cash grants to businesses with projects that meet specific criteria.

The dollar amount of grants is wholly dependent upon the economic impact that the individual project will generate for the community, but in most cases is limited to a 50 percent refund of the direct, indirect and induced taxes that are generated in the local economy as a result of the project.

To qualify, companies must create a minimum of 25 “quality jobs,” at least 90 percent of which will earn at or above El Paso’s Median County Wage (MCW). El Paso’s MCW currently stands at $12.25 per hour. Most of these programs will carry a term of five to 10 years, and all grants are subject to final approval by votes of City Council and county commissioners. Additionally, the granted amount will be larger if a company’s headquarters is locating to the community, or if the capital investment exceeds $30 million.

Limited Property Tax Abatement for up to 10 Years

On a case-by-case basis, local taxing jurisdictions offer property-tax abatement to spur economic growth within the community. Abatements can be provided up to 100 percent of the total value of incremental new investment in buildings and capital equipment for a period up to 10 years; however, typical abatement contracts in El Paso abate 50 percent of the value of incremental new investments for a period of five years. Qualifying criteria are ...

  • Capital investment
  • Job creation
  • Wages

The current incentives policy for the municipal and county governments of El Paso gives preference to utilizing 380/381 grants over tax abatement.

Property Tax Exemptions on Freeport Inventory

All El Paso taxing entities offer an exemption from ad valorem taxes for manufacturing inventories that meet the definition of freeport. All inventories that remain in the facility for a period of no more than 175 days and are exported outside of the state of Texas within that time frame will be classified as freeport, and are therefore exempt from ad valorem taxation.

Green Building Grant Program

This citywide program is designed to encourage development of energy-efficient buildings by providing grants for attainment of LEED certification for new construction or major renovations. Grant awards start at $50,000 and increase up to $200,000. For certain Downtown areas, grant awards double to a maximum of $400,000.

New construction or major remodels of commercial or mixed-use properties are eligible for the program. Structures must be at least 15,000 square feet. Grants range from $50,000 to $200,000, depending on level of LEED certification.

Grants double to $100,000−$400,000 for buildings of at least five floors, of which at least 50 percent have been vacant at least five years prior to grant submission. Properties must become LEED-certified and achieve a minimum of 10 of the 17 point requirements in the “Energy and Atmosphere” section of the LEED Project Checklist.

Expedited Plan Review & Permitting

This incentive is available on a case-by-case basis. In order to ensure that projects are allowed to begin business operations on a timely basis, the city of El Paso may provide all plan reviews and permitting on an expedited basis, whether the company chooses to retrofit an existing building or engage in new construction.

Inclusion into Foreign-Trade Zone (FTZ) #68

An FTZ is a site within the United States, in or near a U.S. Customs port of entry, where foreign and domestic merchandise is generally considered to be in international commerce. Foreign or domestic merchandise may enter this enclave without a formal customs entry or the payment of customs duties or government excise taxes. There are two types of FTZs:

  • The General-Purpose Zone is operated as a public utility, where multiple uses conduct various activities, such as storage, distribution, inspection, destruction, exhibition and some processing.
  • The Subzone is where a company undertakes manufacturing and processing, including oil-refinery activities that cannot be accommodated in a General-Purpose Zone. Subzones must be located at or near a port of entry, and require the approval of a local General-Purpose Zone.

Additional information on FTZ #68 can be found here.
 

Map of General Purpose Zone and all subgroups

General Purpose Zoone and Subgroups

 

Print View

Back to top ↑


State Incentives

Texas Enterprise Fund (TEF)

The $190 million fund is used as a deal-closing fund for companies contemplating jobs and investment in Texas. The funds are used primarily to attract new business to the state or assist with the substantial expansion of an existing business for projects that are considering Texas and at least one other state. Companies can potentially receive grants totaling up to $10,000 per job. Factors that will be considered include …

  • Job creation and wages (at or above the Average County Wage (ACW) currently $16.92 per hour)
  • Capital investment
  • Financial strength of the applicant
  • Applicant’s business history
  • Applicant’s business sector
  • Level of incentives offered by the specific Texas community under consideration


Texas Emerging Technology Fund (ETF)

This $200 million fund created by the Texas Legislature in 2005 is available to companies that seek to commercialize new technologies. ETF funds can also be used to develop collaborative relationships with higher-education institutions in Texas to leverage federal research grants and to achieve research superiority in certain technologies.

Sales and Use Tax Exemptions

The state of Texas provides 100 percent exemption from sales or use tax on equipment and material used in the direct manufacturing process, as well as certain pollution-control equipment, and research and development equipment.

  • Manufacturing Machinery and Equipment — Leased or purchased machinery, equipment, replacement parts and accessories that have a useful life of more than six months, and that are used or consumed in the manufacturing, processing, fabricating or repairing of tangible personal property for ultimate sale, are exempt from state and local sales and use tax.

Texas businesses are exempt from paying state sales and use tax on labor for constructing new facilities. Texas businesses are exempt from paying state sales and use tax on the purchase of machinery exclusively used in processing, packing or marketing agricultural products by the original producer at a location operated by the original producer.

  • Natural Gas and Electricity — Texas companies are exempt from paying state sales and use tax on electricity and natural gas used in manufacturing, processing or fabricating tangible personal property. The company must complete a predominant-use study showing that at least 50 percent of the electricity or natural gas consumed by the business directly causes a physical change to a product.

For additional information on the potential range of exemptions, see the Texas Administrative Code for State Sales and Use Tax.
 

texas skills development fund

Companies can qualify for customized training grants from the Texas Workforce Commission through the Texas Skills Development Fund. The qualifying company must work with a community college or other authorized training provider.  Typical grants are around $1,200 per trainee and are limited to $500,000 per project.

Skills for small business

The Skills for Small Business targets businesses with fewer than 100 employees and provides training for full-time employees. Up to $1,450 for tuition and fees per new hire and up to $725.00 for tuition and fees per incumbent employee. Training must be selected from courses offered by a Texas public community/technical college or the Texas Engineering Extension Service. The program is in partnership with the Office of the Governor to further establish Texas as the premier place to support and expand the state's small businesses.

Self-Sufficiency Fund

The Self-Sufficiency Fund is a job-training program that is specifically designed for individuals that receive Temporary Assistance for Needy Families (TANF). The program links the business community with local educational institutions and is administered by the Texas Workforce Commission. The goal of the fund is to assist TANF recipients in becoming independent of government financial assistance.

The fund makes grants available to eligible public colleges or to eligible private, nonprofit organizations to provide customized job training and training-support services for specific employers. A joint application from the employer and the eligible public college and/or eligible private, nonprofit organization is required to be submitted to the local Workforce Development Board for review and comment prior to approval.

Tax-Exempt Industrial Revenue Bonds

Tax-Exempt Industrial Revenue Bonds are designed to provide tax-exempt financing to finance land and depreciable property for eligible industrial or manufacturing projects. The maximum issuance is $20 million per project.

Texas Enterprise Zone Program

The Texas Enterprise Zone Program allows local communities to partner with the state of Texas to promote job creation and capital investment in targeted areas of the state that meet specific economic criteria. The entire county of El Paso qualifies for Enterprise Zone designation. Designated projects are eligible to apply for state sales and use tax refunds on qualified expenditures that include …

  • Building materials
  • Taxable services
  • Machinery and equipment
  • Electricity, gas and tangible property purchased and consumed in the normal course of business

Qualifying criteria are amount of capital investment, job creation and wages.

 

Texas Enterprise Zone Program, Project Eligibility Criteria

Level of Capital Investment

Maximum Number of Jobs Allocated

Maximum Potential Refund

Maximum Refund Per Job Allocated

$40,000−$399,999

10

$25,000

$2,500

$400,000−$999,999

25

$62,500

$2,500

$1,000,000−$4,999,999

125

$312,500

$2,500

$5,000,000−$149,999,999

500

$1,250,000

$2,500

Double Jumbo Project
$150,000,000−$249,999,999

500

$2,500,000

$5,000

Triple Jumbo Project
$250,000,000 or more

500

$3,750,000

$7,500

 

Print View

Back to top ↑


Federal Incentives

Renewal Communities Initiatives (RCIs)

There are a variety of incentives available for businesses that work in a Renewal Community (RC). Since El Paso was designated an RC, these incentives are available to companies looking to locate in the area. Incentives are in the form of wage credits, deductions and investment incentives.

  • RC Employment Credit — Businesses can take an annual tax credit of up to $1,500 for each employee who lives and works for the business in an RC.
  • Work Opportunity Tax Credits — Businesses can take a tax credit of up to $2,400 for each 18- to 39-year-old new employee who lives in an RC.
  • Commercial Revitalization Deduction — Businesses may elect an accelerated method to recover certain costs of new and/or substantially rehabilitated commercial buildings in an RC.
  • Increased 179 Deduction — RC businesses can take an increase in deduction up to $35,000 of the cost of eligible equipment purchases, subject to certain limitations, in the placed-in-service year of the equipment in an RC.
  • Gross Income Expulsion for RC Capital Gains — Gross income does not include capital gain from the sale of eligible stock or partnership interest held in, or the sale of eligible tangible property held by, an RC business for more than five years. Gains attributable to periods before 2002 or after 2014 will not qualify for the exclusion.
  • Qualified Zone Academy Bonds — State or local governments are able to issue bonds at no interest to finance public school programs. Private businesses must contribute money, equipment or services equal to 10 percent of the bond proceeds. The bond purchasers receive interest payments in the form of tax credits.

Small Business Administration’s 504 Loan Program (SBA 504)

This program is designed to help expanding small businesses get long-term financing at below-market interest rates. Most for-profit, owner-occupied small businesses within the U.S. can qualify if they have a net worth of less than $7.5 million and a net profit after tax (a two-year average) of no more than $2.5 million or if they are a manufacturer with fewer than 500 employees. The funds may be used for the following:

  • Acquisition of land or an existing building
  • New construction
  • Fixed assets from business acquisition
  • Building expansion
  • Long-term equipment
  • Professional fees
  • Lender’s interim points and interest

The program offers fixed rates that are locked in when the SBA funds the debenture. They are based on treasury rates and are fully amortized over the life of the loan (there is no balloon). Real estate fixed rates may have a 10- or 20-year term. Machinery and equipment fixed rates may also have a 10- or 20-year term depending upon if they have useful lives.

The maximum gross debenture (SBA portion) is …

  • $1.5 million for a typical project
  • $2 million if a public-policy goal is met
  • $4 million for manufacturers
  • No maximum limit is placed on participating lender’s loan portion

The borrower’s injection is …

  • 10 percent in most cases
  • 15 percent for start-up businesses (less than two years in operation) or special-purpose properties
  • 20 percent if the project is both a start-up and a special-purpose property
  • Equipment-only loans may qualify with 10 percent or 15 percent injections

Required job creation/retention is …

  • One job for every $50,000 of the debenture for most projects
  • One job for every $75,000 of the debenture for Enterprise Zones and Labor Surplus areas
  • One job for every $100,000 of the debenture for manufacturers
  • No job requirements if a public-policy goal is fulfilled

New Markets Tax Credit (NMTC) Program

This program permits taxpayers to receive a credit against federal income taxes for making qualified equity investments in designated Community Development Entities (CDEs). Substantially, all of the qualified equity investment must in turn be used by the CDE to provide investments in low-income communities.

The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year credit-allowance period. In each of the first three years, the investor receives a credit equal to 5 percent of the total amount paid for the stock or capital interest at the time of purchase. For the final four years, the value of the credit is 6 percent annually.

Investors may not redeem their investments in CDEs prior to the conclusion of the seven-year period. Any organization wishing to receive awards under the NMTC Program must be certified as a CDE by the fund. To achieve certification, an organization must …

  • Be a domestic corporation or partnership at the time of the certification application
  • Demonstrate a primary mission of serving or providing investment capital to low-income communities or persons
  • Maintain accountability to residents of low-income communities through representation on a governing board or advisory board to the entity
     
 

Print View

Back to top ↑

915.298.1000 123 Mills St. Suite 111 El Paso, Texas 79901

Web Design by Sanders Wingo | El Paso Web Development by MindWarp LLC