Who Qualifies for the Exemption?
Any business or industry that assembles, manufactures, processes, stores, maintains, fabricates or distributes their products in Texas and ships them out of state within a 175-day cycle. The Freeport exemption will apply to the percentage of raw materials, goods-in-process and finished products that meet this test. A minimal threshold does not exist, the portion of inventory meeting the requirement qualifies for the exemption.
Economic Development Sales Tax
The Texas Legislature approved legislation that allowed municipalities in the State of Texas the option of enacting up to 1/2% sales tax for the purpose of economic development. The proceeds from the sales tax have been used by municipalities to pay for various infrastructure improvements for relocating or expanding companies. These improvements have included transportation improvements, extension and expansion of water and sewer services and capacity, and a variety of economic development initiatives. The Cities of Kemah, Dickinson, La Marque, Texas City and Hitchcock have adopted the sales tax for economic development.