Sales Tax Exemption on Utilities
Sales Tax Exemption on Utilities will apply if more than 50 percent of utilities are certified for use in manufacturing, processing, or fabricating of products.
Renewable Energy Incentives
Various tax exemptions, franchise tax exemptions, and franchise tax deductions are available for renewable energy equipment and systems. Renewable energy encompasses solar, wind, ethanol, and biodiesel energy.
Detailed information on a variety of renewable energy exemptions and deductions is available at the State Energy Conservation Office.
Solar Energy Device Exemption
A franchise tax exemption is available to manufacturers, sellers, or installers of solar energy devices. The state also permits a corporate deduction from the state’s franchise tax for renewable energy sources. Business owners may deduct the cost of the system from the company’s taxable capital or deduct 10 percent of the company’s income. Wind energy can qualify under the term “solar energy” for the exemption and deduction.
Texas property tax code permits a 100 percent exemption on the appraised value of solar, wind or biomass energy devices installed or constructed for the production and use of energy on-site. To claim this exemption, see Texas property tax Form 50-123. Exemption Application for Solar or Wind-Powered Energy Devices (PDF)
Texas also offers a loan program to fund energy retrofits in public buildings. The “LoanSTAR” program is targeted to state agencies, school districts, higher education, local governments, and hospitals for financed energy retrofits that pay for themselves in energy cost savings over time.
Pollution Control Equipment Incentive
A Texas constitutional amendment providing an exemption from property taxation for pollution control was approved in 1993. The intent was to ensure that compliance with environmental mandates, through capital investments, did not result in an increase in a facility’s property taxes.