Freeport exemptions to benefit city, county
By LPR Staff
With a recent vote by the Lockhart Independent School District Board of Trustees, Lockhart has become the latest community in Central Texas to offer a “triple Freeport exemption,” an additional feather in the city’s economic development cap.
The Freeport Tax exemption was passed by the Texas Legislature in 1989.
In short, the exemption allows manufacturers and exporters to be exempt from personal property tax on tangible inventory that will be shipped out of state within 175 days of its manufacture or receipt.
“SH-130 will enhance Lockhart’s [already] superior highway infrastructure, and its central location,” Lockhart Mayor James “Jimmy” Bertram said shortly after the April 27 vote. “The triple Freeport will increase the probability that companies will locate a new facility here.
According to Lockhart’s Economic Development Director Sandra Mauldin, the triple Freeport exemption was instrumental in Caterpillar’s recent decision to build a 750,000 square foot distribution center in Seguin. She said many manufacturers refuse to consider locating in communities that do not offer the triple Freeport exemption.
Mauldin told the LISD trustees in April that the community’s lack of a triple Freeport exemption was largely responsible for one local industry relocating much of its distribution to a facility outside of Lockhart, costing the local branch nearly $1 million in onsite inventory. As a result of that redistribution, she said, the company was forced to reduce jobs at their Lockhart warehouse.
“Triple Freeport” indicates that the three main taxing entities, the city, the county and the school district, in any given community offer the Freeport exemption. While Caldwell County and the City of Lockhart approved the Freeport exemption several months ago, Lockhart ISD only recently jumped on the Freeport bandwagon.
Once the exemption is offered, it cannot be rescinded. However, companies hoping to claim the Freeport exemption must apply with the Caldwell County Appraisal District before April 30 of each year to receive or maintain the exemption.
“More investors have been looking at us and there are more commercial realtors visiting,” Mauldin said. “We also have increasing activity in housing markets.”
Mauldin suggested the current pattern of growth points to positive things on the horizon for Lockhart, despite the slumping economy elsewhere in the nation.
“In the past few months, we have had a new bank open in Lockhart, six new retail businesses, and one of our newest companies is planning for expansion,” she said. “[SH-130] activity began months ago with the construction of the SH130 Plum Creek Wetland Mitigation Project and the new offices built by the SH-130 Concessions company.”
It is unclear whether local businesses have applied for the triple Freeport exemption for the current tax year. However, Mauldin said, few currently-existing local companies will be eligible for the exemption, and it is not expected to have a negative impact on this year’s tax collections.
The impact, she hopes, will be a positive one, as manufacturers searching for new locations realize that Lockhart is now able to offer some of the same benefits as larger, neighboring communities.