The Texas Enterprise Zone Program (EZP) offers a state sales and use tax refund worth $2,500 per qualifying employee at a qualified business site. The maximum benefit is subject to the type of project designation determined by the company’s level of capital investment and associated new or retained jobs at a qualified business site.
How Texas enterprise zone can help business expansion or retention projects provides an overview of the EZP program. This article will focus on the following nuances that are unique to this program.
- Recent legislative changes allowing for remote employees
- Despite the program’s name, applicants are not required to be located in an enterprise zone
- Retroactive 90-day window
What is a qualified employee?
Since the COVID-19 pandemic, many companies have implemented permanent hybrid or remote work schedules, allowing employees to work a portion of their time off-site. In recognition of the changing work environment, House Bill 1515 was passed on June 12, 2023, expanding the definition of qualified employee to the following:
- Is a Texas resident
- Works for a qualified business
- Receives wages from the qualified business from which employment taxes are deducted
Additionally, to be considered a qualified employee, an individual must meet one of the following qualifications:
- The person performs at least 50% of their service for the business at the qualified business site
- If the person engages in the transportation of goods and services, the person reports to the qualified business site and resides within 50 miles of the qualified business site
- If the person engages in services off-site, the person is assigned to the qualified business site and resides within 25 miles of the qualified business site
The above modifies the widely utilized Texas EZP to meet the needs of employers who implement permanent hybrid or remote work schedules. Most notably, an employee is no longer required to perform at least 50% of their service at the qualified business site. The new statute allows employees who work off-site to qualify if they live less than 25 miles from the qualified business site.
How Texas enterprise zones can help business expansion or retention projects
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.
