State Program
Texas Research and Development Incentive
A research and development incentive provided through a sales and use tax exemption for qualifying materials and equipment.
Program Overview
Texas provides a sales and use tax exemption for qualifying tangible personal property used directly in qualified research. The current program replaced the previous franchise tax credit option for applicable periods beginning in 2026. Eligible businesses must obtain a research and development registration number from the Texas Comptroller and provide the required exemption certificate to suppliers when purchasing qualifying property.
Eligibility
- Taxable entities conducting qualified research in Texas may qualify.
- Businesses must obtain the required research and development registration number from the Texas Comptroller.
- Property must meet the applicable requirements for use directly in qualified research.
- Required exemption certificates must be provided to suppliers at the time of qualifying purchases.
Benefits
- Exemption from Texas sales and use tax on qualifying tangible personal property used directly in qualified research.
- Qualifying property may include depreciable tangible personal property, subject to applicable requirements.
- The exemption may apply to qualifying purchases, leases, or rentals where permitted under current Texas rules.
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