Introduction
Texas’ flagship incentive program—Chapter 313 of the Texas Tax Code—officially sunset in December 2022, leaving businesses in 2025 asking: What replaces it?
If you’re a data center, manufacturer, or renewable energy firm seeking property tax relief, here’s what you need to know about the end of Chapter 313 and the alternatives emerging post-sunset.
Texas Code References
- Texas Tax Code §313 – (Sunset 2022) Property value limitation agreements
- Texas Property Tax Code §312 – Local abatements
- Texas Economic Development & Tourism Office – New incentives proposed in 2024–2025
What Chapter 313 Used to Offer
- 10-year limitation on taxable property value for school district M&O tax
- Primarily targeted at capital-intensive projects (manufacturing, energy, data centers)
- Required job creation and local school district agreement
With its expiration:
- No new agreements can be approved
- Existing agreements remain in force until expiration
- Businesses must now turn to local or federal programs
What’s Available Now (2025)?
- Chapter 312 (Local Property Tax Abatements):
- Cities and counties may still offer abatements
- Duration usually capped at 10 years
- Negotiated case-by-case
- Texas Enterprise Fund (TEF):
- Offers cash grants for high-impact job creation
- Competitive and discretionary
- Texas Economic Incentive Programs (New Proposals):
- A possible Chapter 403 replacement is under legislative review
- Aims to target green energy, semiconductors, and advanced manufacturing
- Federal IRA & CHIPS Act Credits:
- Overlaying federal support now plays a larger role
Example: Semiconductor Facility in Austin
Example: QuantumCore Inc. is planning a $750M fab in Travis County. Without Chapter 313:
- They negotiate a Chapter 312 abatement with county
- Apply for a Texas Enterprise Fund grant
- Leverage federal IRA energy credits
While M&O tax relief under 313 is gone, stacking multiple incentives helps retain the ROI.
Step-by-Step: Post-313 Incentive Strategy
- Evaluate Project Scope
Define capital investment, job creation, and location. - Approach Local Authorities
Negotiate under Chapter 312 for abatements. - Apply to State-Level Incentive Funds
Check TEF and new grant programs under the Governor’s Office. - Use Federal Programs
IRA, CHIPS Act, and clean energy credits remain active. - Stay Updated on Legislative Developments
Texas may pass a new Chapter to replace 313 by late 2025.
Conclusion
While Chapter 313 is no longer available, Texas remains pro-business with local abatements, federal overlays, and grant programs filling the gap.
Startups and high-capex projects should layer incentives and engage early with both state and local bodies.
Call to Action
Lost your Chapter 313 tax relief? There are still strategic options available.
Book a consultation with Anshul Goyal, CPA, EA, FCA to:
- Restructure your Texas incentive stack post-313
- Navigate new Chapter 312 and TEF programs
- Integrate federal clean energy or CHIPS credits
Don’t miss out on funding—structure your project right.
https://calendly.com/anshulcpa/
About Our CPA
Anshul Goyal, CPA, EA, FCA
Anshul brings 15+ years of U.S. and international tax experience. He specializes in helping online sellers, foreign founders, and U.S. residents with IRS and multi-state compliance. Known for his deep knowledge in Shopify and Amazon seller tax strategy, Anshul has helped hundreds of entrepreneurs minimize taxes and scale legally.
Disclaimer
This blog is for informational purposes only and does not constitute legal or tax advice. Please consult a qualified tax professional regarding your individual tax situation.
Anshul Goyal, CPA, EA, FCA, is a licensed Certified Public Accountant in the United States, admitted to practice before the IRS as an Enrolled Agent. He also represents clients in IRS litigation and specializes in helping U.S. and Indian businesses meet complex tax compliance requirements.
Top 5 High-Searched FAQs (2025)
1. Is Chapter 313 still available in Texas?
No, it sunset in December 2022. No new applications are accepted.
2. What replaced Chapter 313?
Currently, Chapter 312 abatements and TEF grants are the main options.
3. Can existing Chapter 313 agreements continue?
Yes, existing contracts will remain valid until their expiration.
4. Is there a new tax incentive bill in the works?
Yes, legislation is being discussed to replace 313, likely by end of 2025.
5. Can I stack federal and state-level incentives?
Yes. Many projects now combine Chapter 312 with federal IRA or CHIPS credits.