Regulatory & Tax Environment
Texas business advantages, incentives, and compliance framework.
Sales Tax
0%
Property Tax Abatement
Up to 100%
Permitting Timelines
Critical Path Dependencies (Months)
Primary Regulatory Constraint
Bexar County has been reclassified by the EPA to "Serious" Non-Attainment for Ozone. This significantly lowers the NOx emissions threshold to 50 tons per year (tpy) for Major Source designation, making standard Tier 2 diesel generator arrays likely un-permittable. Natural Gas backup generation is recommended to bypass the Ozone permitting risk.
Environmental Zoning Risk
The Edwards Aquifer Recharge Zone (EARZ) is a "NO GO" criterion, as it voids tax abatements and caps impervious cover at 15–30%. Preferred sites are in the Transition or Contributing Zones (e.g., Westover Hills / Medina County).
Sales Tax Exemption (Central Lever)
The Texas State Sales Tax Exemption for Qualified Data Centers provides a 100% exemption on the 6.25% state sales tax for servers, cooling, electricity, and generators. Eligibility requires a minimum Capital Investment of >$200MM over 5 years and creation of 20 permanent jobs.
Local Property Tax Incentives
Chapter 312 property tax abatements in preferred geographies (South of Loop 410) can offer up to 100% abatement for 10 years. Typical range: 40-80% for 10 years from Bexar County and the City of San Antonio.
Incentive Timing
The local Chapter 312 Inducement Resolution must be passed before signing a construction contract or issuing a Notice to Proceed, to avoid project disqualification.
Water Compliance
Potable water use is effectively banned for new large loads. Compliance requires an Industrial Wastewater Discharge Permit and TCEQ Chapter 210 authorization for the use of Type II Reclaimed Water.