Taxes & Incentives

Local- City Economic Incentives

Our Economic Development Incentive Policy creates a program to be used by the City of Nacogdoches for qualification of projects and determination of incentive level and type of incentive.

The City of Nacogdoches vision statement:
“Nacogdoches is a premier City retaining its distinctive character, where families and businesses flourish in a safe, clean environment.”

Projects undertaken by the City will help further the vision statement in addition to promoting the mission of the Nacogdoches Economic Development Corporation:
“The mission of the Nacogdoches Economic Development Corporation is to facilitate growth and prosperity throughout Nacogdoches County and its incorporated cities by helping existing businesses achieve greater success; by fostering local entrepreneurship; by recruiting new industry and business to
Nacogdoches County; and by helping develop a well-trained workforce.”

The City will, on a case-by-case basis, give consideration to providing incentive for economic stimulus in Nacogdoches to accomplish one or more of the following objectives:

• Development and diversification of the economy
• Reduction of underemployment
• Attraction of major development
• Stimulation of agricultural or technological innovation
• Expansion of primary employment and knowledge-based jobs
• Increasing average wage in Nacogdoches
• Significant improvement of quality of life
• Contribution to preservation and adaptive reuse of significant historic structures
and neighborhoods.

In coordination with the Nacogdoches Economic Development Corporation, the City of Nacogdoches may establish targeted programs to accomplish one or more of the above objectives. Examples of such programs include, but are not limited to:

• Special incentive programs within defined areas of the City to promote infill
development or adaptive reuse of buildings in targeted neighborhoods
• Grants to offset costs associated with public infrastructure improvements
• Targeted retail and/or entertainment sector recruitment
• Targeted recruitment aimed at sectors directly related to programs at Stephen F.
Austin State University
• Capital grants for technological innovation resulting in higher wage job growth
• Grants to offset costs associated with increased partnership and production
between two existing businesses.

For more information about eligible projects, determination of incentives, and project criteria please view the City Incentive Policy here. Contact the Nacogdoches Economic Development Corporation (NEDCO) if you have any other questions.

Local- County Tax Abatement

General Criteria

All applications must meet the following general criteria before being considered for tax abatement:

  1. The project expands the local tax base.
  2. The project creates permanent fulltime employment opportunities.
  3. The project would not otherwise be developed.
  4. The project makes a contribution to enhancing further economic development.
  5. The project must remain in good standing with all governmental and environmental regulations.
  6. The project has not been started and no construction by the applicant has commenced at the time the application is approved.
  7. The project must not have any of the following objections:
    • Have substantial adverse effect on the provision of government service on tax base;
    • The applicant has insufficient financial capacity;
    • Planned or potential use of the property would constitute a hazard to public safety,
    • Planned or potential use of the property would create adverse impact to adjacent properties:
    • Any violation of laws of the U.S., the State of Texas, or ordinances of Nacogdoches County, Texas would occur, or
    • It is in an improvement project financed with tax increment bonds.

Specific Criteria

If the project in the application meets the general criteria, is a facility of a targeted enterprise, and has a capital cost that exceeds $1Million then abatement of any or all of the increased value will be considered. In no case would tax abatement exceed the maximum allowed by state law, presently 100% for 10 years. Factors to be considered in determining the portion of the increased value to be abated and the duration of the abatement agreement include, but are not limited to the following:

  1. Total amount of the increased value.
  2. Total number of jobs created.
  3. Type of jobs created.
  4. Dollar value of payroll created.
  5. Other costs and revenues associated with the application.

216 West Hospital Street
Nacogdoches, TX 75961
(936) 560-3447

Local- Freeport Exemption

Freeport property qualifies for an exemption from ad valorem taxation only it has been detained in the state for 175 days of less for the purpose of assembly, storage, manufacturing, processing or fabricating.  Freeport property includes goods, wares, merchandise, ores and certain aircraft and aircraft parts. The City of Nacogdoches and Nacogdoches ISD offer a freeport exemption, but the County does not.   Contact the Nacogdoches Central Appraisal District for more information.  Nacogdoches Central Appraisal District – Official Website (

State Incentives

Texas invests in its future by offering competitive incentives to companies who are creating jobs and investing in Texas.   The incentive in the section are a summary of the most commonly utilized state incentive programs offered by the Texas Department of Economic Development Finance.    For a complete list of Texas incentive Programs, please refer to the IncentivesOverview.pdf (

Texas Enterprise Fund

The Texas Enterprise Fund (TEF) is the largest “deal-closing” fund of its kind in the nation. The fund is used as a performance-based financial incentive tool for projects that offer significant projected job creation and capital investment and where a single Texas site is competing with another viable out-of-state option.

Events Trust Funds

The Events Trust Funds program applies local and state gains from sales and use, auto rental, hotel, and alcoholic beverage taxes generated over a specified period of time. Eligible events are not restricted to sports, but the venue must have been selected through a highly competitive selection process.

Governor’s University Research Initiative

The Governor’s University Research Initiative grant program (GURI) has a goal to bring the best and brightest researchers in the world to the State of Texas. This program is a matching grant program to assist eligible institutions of higher education in recruiting distinguished researchers.

Texas Enterprise Zone Program

The Texas Enterprise Zone Program is an economic development tool for local communities to partner with the State of Texas to promote job creation and significant private investment that will assist economically distressed areas of the state.

Product Development and Small Business Incubator Fund

The Product Development and Small Business Incubator Fund (PDSBI) is a revolving loan program financed through original bond issuances. The primary objective of the program is to aid in the development, production and commercialization of new or improved products and to foster and stimulate small business in the State of Texas.

Texas Small Business Credit Initiative

The objective of the Texas Small Business Credit Initiative (TSBCI) is to support state programs that provide resources to assist small business growth and create new jobs through increased access to small business funding. In addition, the program will assist small businesses that are traditionally marginalized and those that have been impacted by the COVID-19 pandemic. The TSBCI is expected to be allocated more than $472 million and the State of Texas is focused on staying apprised of the latest program information released by the U.S. Department of the Treasury.

Skills Development Fund

The Skills Development Fund is an innovative program created to assist Texas public community and technical colleges finance customized job training for their local businesses. The Fund was established by the Legislature in 1995 and is administered by the Texas Workforce Commission. Grants are provided to help companies and labor unions form partnerships with local community colleges and technical schools to provide custom job training. Average training costs is $1,800 per trainee; however, the benefit may vary depending on the proposal.

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 become 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.

 Additional Incentive Programs