Small Business Incentive Programs in Texas

Agency: Texas Department of Agriculture

This fund supports small businesses in rural Texas communities by providing grants and low-interest loans for business expansion, equipment purchases, and job creation. The program aims to strengthen rural economies by helping local businesses grow and thrive, with particular emphasis on agricultural and agribusiness enterprises that serve rural communities throughout Texas.

Agency: SCORE Association

SCORE provides free business mentoring and educational workshops to Texas small business owners through volunteer experts with real-world experience. This nationwide program offers one-on-one mentoring, online resources, and local workshops covering topics like business planning, marketing, and financial management, making it invaluable for LLC owners seeking guidance and support.

Agency: U.S. Small Business Administration

This program helps women-owned small businesses compete for federal contracts by providing access to set-aside contracts in industries where women are underrepresented. Texas LLC owners who qualify can access billions in federal contracting opportunities, providing a stable revenue source and growth potential through government partnerships.

Texas Research and Development Tax Credit

Texas offers a franchise tax credit for qualified research expenses, allowing businesses to reduce their franchise tax liability based on research and development activities conducted in Texas. Texas replaced this credit effective January 1, 2026. Under the new credit a business must have filed IRS Form 6765 for each year it claims the Texas credit, and the expenses that count are the ones for research conducted in Texas. A business that owes no franchise tax because its annualized total revenue is at or under the no-tax-due threshold may be able to receive the credit as a refund. The Comptroller's research and development credit page has the current forms and instructions.

Eligibility: Businesses subject to Texas franchise tax that conduct qualified research activities in Texas and incur eligible research expenses.

Skills Development Fund Tax Credit

This program provides grants to businesses and training providers for customized job training that upgrades workers' skills. While not directly a tax credit, participating businesses can receive funding for employee training that reduces operational costs.

Eligibility: Texas businesses that create new jobs or significantly upgrade existing jobs, with priority given to companies in high-demand industries.

Texas Enterprise Zone Program

Businesses located in designated enterprise zones can receive state sales and use tax refunds on qualified expenditures for construction materials, equipment, and machinery used in the zone. This program helps reduce operational costs for businesses in economically disadvantaged areas.

Eligibility: Businesses located in designated enterprise zones that make qualified investments and create jobs. Must be nominated by local government and meet investment thresholds.

Franchise Tax 'No Tax Due' Threshold

Businesses with annualized total revenue at or below $2,650,000 for the 2026 report year owe no franchise tax, while those with $20 million or less in annualized total revenue may elect the EZ computation, which applies a 0.331% rate to apportioned total revenue but gives up every margin deduction (cost of goods sold, compensation, 30% of revenue, or $1 million) and all franchise tax credits for that report year.

Eligibility: LLCs and other entities subject to Texas franchise tax with annual total revenue below specified thresholds.