Texas Small Business Grants and Incentives in 2026

Texas doesn't offer one general grant program for small businesses. Its main state and local incentives are training grants through the Skills Development Fund, deal-closing grants and school property tax limitations for large job-creating projects, and local property tax abatements, plus a franchise tax that most small businesses owe nothing on.

Last checked: October 25, 2026. This page is general information, not tax, legal, or financial advice.

Taxes first: no income tax, and a franchise tax threshold

Texas has no personal income tax and no corporate income tax. Most businesses are subject to the state franchise (margin) tax instead. For 2026 and 2027 reports, the Texas Comptroller lists a no-tax-due threshold of $2,650,000 in annualized total revenue. An entity at or below that threshold owes no franchise tax, but it still has to file an information report (a Public Information Report or Ownership Information Report). Above the threshold, the Comptroller lists rates of 0.375% for retail and wholesale and 0.75% for other businesses.

Skills Development Fund

The Skills Development Fund is run by the Texas Workforce Commission (TWC) and pays for customized job training for a business's new or current workers. The business doesn't apply alone. According to TWC, eligible grant applicants are public community and technical colleges, the Texas A&M Engineering Extension Service (TEEX), community-based organizations partnered with a college or TEEX, the Texas Engineering Experiment Station and local workforce development boards. The college or other partner applies for and administers the grant, and the training is built around what the partner business needs.

TWC says a single business in a partnership can receive up to $500,000 in training, with more available to a consortium of businesses. Trainees must be full-time W-2 employees, proposals are accepted year-round, and grants typically run 12 months. To start, contact a local community or technical college or your local workforce board, or TWC's business outreach line at 877-463-1777.

Local property tax abatements (Chapter 312)

Under Chapter 312 of the Texas Tax Code, a city, county or special district can sign an agreement that exempts all or part of the increase in a property's value from its taxes for up to 10 years. The Comptroller notes that school districts can't enter into these abatement agreements.

A few rules worth knowing before you ask:

• The taxing unit must have adopted guidelines and criteria for abatements and a resolution saying it will take part. The statute says that doesn't create a right for any business to receive an abatement.
• The property has to be in a reinvestment zone.
• The agreement must require specific improvements or repairs, and must include recapture provisions if the business doesn't meet its terms.
• The governing body has to give notice at least 30 days before the meeting where it considers the agreement.
• Under the current statute, Chapter 312 expires September 1, 2029, unless the Legislature continues it.

Terms are negotiated locally and vary widely. The Office of the Governor's incentives page says local incentives and tax abatements aren't covered there and points businesses to their local economic development representative.

Moving or expanding your business to Texas

If you're relocating or expanding into Texas, the state has two large-project tools that sit alongside local abatements. Both are competitive and discretionary, and neither is guaranteed. Timing matters for both: talk to the state and local offices before you commit to a Texas site.

Texas Enterprise Fund (TEF) The TEF, run by the Office of the Governor, awards "deal-closing" cash grants when a single Texas site is competing with at least one viable out-of-state site. The company must not have made a location decision yet; the Governor's office says signing a lease, buying land, hiring employees or announcing a location are signs that it has. Other requirements include:

• new jobs of more than 75 full-time in urban areas or more than 25 in rural areas
• an average wage for the new jobs at or above the county average for the full grant term
• significant planned capital investment and local support, such as a local incentive offer
• a well-established, financially sound company in an advanced industry

Awards are calculated using a uniform model based on wages, the hiring timeline, the number of jobs and capital investment. No money is paid until the company meets its job and wage targets, and the contract allows clawbacks. Applications are accepted on a rolling basis through the TEF portal, go through an 11-step due diligence review, and need unanimous approval from the Governor, Lieutenant Governor and Speaker of the House.

Texas Jobs, Energy, Technology and Innovation Act (JETI) JETI was created by House Bill 5 in 2023 (88th Legislature) and is codified in Chapter 403, Subchapter T of the Texas Government Code. It allows a company, a school district and the Governor's office to agree to a 10-year limitation on the school district's maintenance and operations (M&O) taxes, at 50% of appraised value, with an additional 25% for projects located in qualified Opportunity Zones.

Eligible project types are manufacturing, dispatchable electric generation, natural resource development, research, development or manufacturing of high-tech infrastructure equipment or technology, and critical infrastructure. Renewable energy and energy storage projects aren't eligible. Minimums depend on county population:

Dispatchable electric generation isn't subject to the job requirement. Applicants pay a $30,000 application fee to the school district, submit through the Comptroller's eSystems, and must show the project's site selection is competitive. Approval from the Governor and the school district is required, so the Governor's office recommends contacting the school district first.