Freeport & Goods In Transit Tax Exemptions
FREEPORT AND GOODS IN TRANSIT EXEMPTIONS
FREEPORT SUMMARY
In 1989, Texas voters approved a constitutional amendment giving local taxing jurisdictions the option to exercise or not exercise their authority to tax specific personal property known as Freeport Goods. Several Gainesville-area grant the freeport exemption and/or the Goods In Transit, providing a substantial financial benefit to Gainesville-area primary employers.
The freeport exemption exempts certain types of tangible personal property (i.e., inventory) from ad valorem (property) taxation provided the property:
- Is acquired in or imported into Texas to be forwarded out of state; and
- Is detained in Texas for assembling, storing, manufacturing, processing, or fabricating purposes by the person who acquired or imported it; and
- Is transported out of state within 175 days after the date the person acquired or imported it into Texas.
- Does not include petroleum products as set forth in Article VIII, Section 1-j, of the Texas Constitution shall mean liquid and gaseous materials that are the immediate derivatives of the refining of oil or natural gas.
Because oil, natural gas, and other petroleum products are not considered freeport goods, they are not eligible for the exemption and therefore remain taxable. Even when goods are sold to an in-state purchaser rather than shipped out of the state, they may qualify for the Freeport exemption - however, the property must qualify under the above requirements as Freeport property and must be transported out of the state within 175 days after it was first acquired in or imported into the state.
Texas Comptroller Transit Exemption Information
GOODS IN TRANSIT SUMMARY
In 2011, Texas voters approved a constitutional amendment giving local taxing jurisdictions the option to exercise or not exercise their authority to tax specific personal property (i.e., inventory) known as Goods in Transit.
The goods in transit exemption exempts certain types of tangible personal property (i.e., inventory) from ad valorem (property) taxation provided the property:
- Is acquired in or imported into this state to be forwarded to another location in this state or outside this state; and
- Is stored under a contract of bailment by a public warehouse operator at one or more public warehouse facilities in this state that are not in any way owned or controlled by the owner of the personal property for the account of the person who acquired or imported the property; and
- Is transported to another location in this state or outside this state not later than 175 days after the date the person acquired the property in or imported the property into this state; and
- Does not include oil, natural gas, petroleum products, aircraft, dealer's motor vehicle inventory, dealer's vessel and outboard motor inventory, dealer's heavy equipment inventory, or retail manufactured housing inventory.
Texas Comptroller Transit Exemption Information
| Entity | Freeport Exemption | Goods In Transit Exemption |
| City of Gainesville | ✓ | |
| Cooke County | ||
| North Texas Medical Center | ✓ | |
| North Central Texas College | ✓ | |
| Gainesville ISD | ✓ | ✓ |
| Lindsay ISD | ||
| Sivells Bend ISD | ✓ | ✓ |
APPLICATION PROCESS (VIA COOKE COUNTY APPRAISAL DISTRICT)
The amount of the freeport and/or goods in transit exemption for each year is normally based on the percentage of inventory made up by such goods last year. A two-page application requests a company to identify property owned on January 1 of each year (or September 1 of the preceding year if the company receives a September 1 inventory appraisal). A company must apply for the exemption each year from the Cooke County Appraisal District www.cookecad.org between January 1 and March 1.
Download the Freeport Application
Download the Goods In Transit Application
Contact the Gainesville Economic Development Corporation with questions:
940-665-5241
William@gainesvilletxedc.com
Category: Local