Texas City

City of Texas City

City Summary

Background

In the late 1980s, the City of Texas City realized the necessity to diversify and stimulate its economy and began to aggressively develop an economic development strategy. The strategy contemplated having a versatile inventory of integrated economic development vehicles available to exploit the City's numerous assets and accommodate any economic development project requirement. Accordingly, several local government corporations, that have specific economic development missions and resources, have been created to interact, share resources and collectively pursue economic development projects. Other vehicles have also been implemented to provide a holistic approach to economic development within the City. The strategy is working and the City is proactively achieving its goals.

Diversified Economy

Texas City is fortunate to have a diversified economy. Heavy industry is the largest and was, since the 1900's, the City's only economic engine until the City's economic development strategists realized the City's vulnerability and began diversifying the economy. Now, the City's economy is driven by several industries including residential, commercial, retail, marine, entertainment and environmental developments, higher education, tourism, health care, sports, transportation, birding, fishing, boating and restaurants. This diversification evolved from the City's economic development strategists who created the numerous economic development vehicles that are available to accommodate the requirements of economic development projects.


City of Texas City

Demographics

Population (2014 Est.)
Males 22,596
Females 24,043
Total 46,639
Population Incomes (2015 Est.)
Median Household $48,525
Per Capita $23,715
Education (Ages 25+)
High School or Higher 82.1%
Bachelor’s Degree or Higher 12.8%
Graduate or Professional Degree 4.1%

Taxes and Business Costs

Taxing Entity Adopted Tax Rate Maintenance & Operations Rate Debt Rate Effective Tax Rate Effective Maintenance & Operations Rate Rollback Tax Rate
COLLEGE OF THE MAINLAND
Tax Year 2016 0.208376 0.208376 0 0.208376 0.208376 0.225046
TEXAS CITY, TEXAS
Tax Year 2016 0.497183 0.404499 0.092684 0.497183 0.403028 0.537467
TEXAS CITY ISD
Tax Year 2016 1.4405 1.17 0.2705 1.1148 1.0834 1.4406
GALVESTON COUNTY
Tax Year 2016 0.552 0.464209 0.087791 0.557981 0.464838 0.598946

Sales Tax Rate (2017): 8.25%

Incentives

Foreign Trade Zone

The City of Texas City operates a Foreign Trade Zone (#199) in accordance with the Foreign Trade Zone Act. The Foreign-Trade Zones Act was created to "expedite and encourage foreign commerce" in the United States. This is accomplished through the designation of geographical areas, in or adjacent to Customs Ports of Entry, where commercial merchandise receives the same Customs treatment it would if it were outside the commerce of the United States. Merchandise of every description may be held in the Zone without being subject to Customs duties and other ad valorem taxes. This tariff and tax relief is designed to lower the costs of U.S.-based operations engaged in international trade and thereby create and retain the employment and capital investment opportunities that result from those operations.

These special geographic areas — Foreign-Trade Zones — are established "in or adjacent to" U.S. Ports of Entry and are under the supervision of the U.S. Customs Service. The primary mission of Foreign Trade Zone #199 is to provide the local petrochemical industries and other enterprises engaging in international commerce with a competitive global marketing advantage that stimulates expansion of their operations and enhances the local, state, and national economies. A U.S.-based manufacturer can bring foreign-sourced parts or materials into the Zone, pay no duty, incorporate those parts or materials into a finished product using U.S. parts and labor, and, if the finished product entered the U.S. commerce, pay duty on the value of the foreign non-duty-paid content only.

The City of Texas City oversees Foreign Trade Zone #199, and allows interested parties to create a subzone that is then operated by the business and then provides reports to the City. There are a number of consultants and sources with information as to how the ability of a company to create a subzone for a Foreign Trade Zone is available. The City of Texas City will work with the company after an agreement is prepared. Local Ad Valorem taxes are still paid under the agreement, but all other benefits of the Foreign Trade Zone are provided to the business. A brief summary follows:

  • DUTY EXEMPTION ON RE-EXPORTS: If merchandise is re-exported after being placed in a FTZ or shipped to another FTZ and then re-exported, then no duty is ever paid.
  • RELIEF FROM INVERTED TARIFFS: Generally, if foreign merchandise is brought into a FTZ or Subzone and manufactured into a product that carries a lower duty rate, then the lower rate applies.
  • DUTY ELIMINATION ON WASTE AND SCRAP: No duty is charged on most waste and scrap from production in FTZs.
  • NO DUTY ON REJECTED OR DEFECTIVE PARTS: Merchandise found to be defective or faulty may be returned to the country of origin for repair or simply destroyed. Whichever choice is taken, no duty is paid. Many companies suffer from the "double duty crunch." That is, they pay duty on imported merchandise, find it to be faulty and return it to the country of origin for repair, and then pay duty again when the merchandise reenters the United States. If you are a FTZ user or Subzone, the "double duty crunch" is never a problem, because your merchandise never enters the commerce of the United States.
  • DUTY DEFERRAL: No duty is ever charged on merchandise while it is in a FTZ, and there is no limit on the length of time merchandise may be kept in a FTZ. By deferring the duty, capital is freed for more important needs.
  • NO DUTY ON DOMESTIC CONTENT OR VALUE ADDED: The "value added" to a product in a FTZ (including manufacture using domestic parts, cost of labor, overhead and profit) is not included in its dutiable value when the final product leaves the Zone. Final duties are assessed on foreign content only.
  • NO DUTY ON SALES TO THE U.S. MILITARY OR NASA: No duty is charged on merchandise sold from a FTZ to the U.S. Military or NASA, returned to the country of origin for repair or simply destroyed. Whichever choice is taken, no duty is paid.

Tax Increment Financing / Tax Reinvestment Zones

The City of Texas City has worked with developments to create a Tax Reinvestment Zone for the purpose of Tax Increment Financing on projects that would provide lasting value for the City and would meet the goals of the City in housing needs, regional retail/commercial/office, or job creation. Tax increment financing is a tool that local governments can use to finance needed infrastructure improvements using property taxes generated within a defined area. These improvements usually are undertaken to promote the viability of an area and to attract new development, renovation, or restoration. The statues governing tax increment financing are located in Chapter 311 of the Texas Tax Code.

The cost of improvements to the area is repaid by the contribution of future tax revenues by each taxing unit that levies taxes against the property. Specifically, each taxing unit can choose to dedicate all, a portion of, or none of the tax revenue that is attributable to the increase in property values due to the improvements within the reinvestment zone. The property is appraised at its current value prior to any public or private improvements made within the zone. This is the baseline. As public or private improvements are made within the zone the increase value or increment above the baseline value has that added tax value or portion of added tax value provided to the zone to pay for agreed upon public improvements. The additional tax revenue that is received from the affected properties is referred to as the tax increment. Each taxing unit determines what percentage of its tax increment, if any, it will commit to repayment of the cost of financing the public improvements.

Tax increment financing may be initiated only by a city. If a property is located outside of the city limits (within the city's extraterritorial jurisdiction or beyond), it is not eligible for tax increment financing unless annexed into the city. Once a city has begun the process of establishing a tax increment financing reinvestment zone, counties, school districts, and special districts are allowed to consider participating in the tax increment financing agreement. Each zone will have its own distinct agreement negotiated primarily by the City and developer, but with input from the other taxing entities interested in participating.

Points of Contact

 

City of Texas City
1801 9th Avenue North
Texas City, Texas 77592
409-948-3111
www.texas-city-tx.org

 

 

Downloadable Content

PDF Document  6th Street Incentives

PDF Document  Revitalization District Guidelines

PDF Document  Texas City’s Other New Development District

Source of Business and Labor Numbers: The Next Move Group