What is Triple Freeport Tax Exemption When Renting Warehouse Space in Texas?

triple freeport tax exemptions texasWhen reviewing warehouse spaces for rent sometimes a landlord will tell you that their industrial property location has Triple Freeport Tax Exemptions. If you are a seasoned company that warehouses and distributes goods then you may know what this is, however most businesses really don’t understand what it means or how it could benefit their company. If you want to rent warehouse space it’s important that you ask your agent or the chamber of commerce economic development contacts about any potential economic benefits especially if you are warehousing goods and/or plan on employing a lot of people.

So What does Triple Freeport Tax Exemption Mean?

If a warehouse rental property is marketing that they have Triple Freeport Tax Exemptions it means that all 3 taxing authorities (County, School District, and City) have agreed to give tax breaks on all eligible inventory that you have in your warehouse space. You do not have to pay inventory tax on any goods that move in and out of Texas within a 175 day period from the date of acquisition or brought into the state.

Here is an example:

  • Day 1 your inventory is acquired or arrives in Texas
  • Days 2-174 – Inventory is manufactured, stored, assembled, or serviced
  • 175th Day – All the inventory is moved out of Texas

Inventory Tax that you Owe? ZERO

Why do Cities Offer a Triple Freeport Tax Exemption on Eligible Inventory?

Because they want to attract more commercial businesses to their city. More commercial businesses mean more warehouse space is leased and more jobs and tax bases are created. If cities want to attract more manufacturing and distribution companies they have to be able to offer Triple Freeport in order to remain competitive with other neighboring cities. If you would like to learn more about Texas freeport tax exemptions click here.

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