Overview
State Law Sets the Terms
Texas levies no personal income tax, which lowers founder and employee costs compared with California and New York. Businesses pay the state franchise tax on margins instead, with small companies below a revenue threshold owing nothing.
Austin's own tools are narrower: performance-based incentive agreements, permitting and land use. State law preempts city rules on autonomous vehicles and leaves most technology regulation to the Legislature.
State Incentives
State Incentive Programs
The Office of the Governor and the Comptroller run the main state programs. Most target larger employers and manufacturers; startups usually meet them through university grants, suppliers or later-stage expansion. See Texas state strategic capital to Austin for awards.
| Program | Run by | What it does |
|---|---|---|
| Texas Enterprise Fund (2003) | Office of the Governor | Deal-closing cash grants tied to jobs and capital investment when Texas competes with another state |
| JETI Act (2023) | Comptroller | School property tax limits for large projects; replaced the expired Chapter 313 program |
| Texas Semiconductor Innovation Fund (2023) | Office of the Governor | Grants for chip research, design and manufacturing under the Texas CHIPS Act |
| Texas Space Commission (2023) | Office of the Governor | Space Exploration and Aeronautics Research Fund grants to space companies and universities |
Local Incentives
Chapter 380 and 381 Agreements
Chapter 380 of the Texas Local Government Code lets cities give grants, loans or tax rebates for economic development; Chapter 381 gives counties the same power. Austin City Council approves Chapter 380 agreements negotiated by the Economic Development Department, paid out only as companies meet job, wage and local-hiring targets; a recent example is the Southwest Airlines expansion at Austin-Bergstrom International Airport.
Counties use Chapter 381 for the largest deals. Travis County approved one for Tesla Giga Texas in 2020, and Williamson County and the City of Taylor used local agreements to land Samsung's Taylor fab. See county and municipal strategic capital.
Autonomous Vehicles
Autonomous Vehicle Law
SB 2205 (2017) made autonomous vehicle rules a state matter, so the City of Austin cannot license or cap robotaxis. That let Waymo and Tesla launch driverless ride-hailing in Austin without city permits.
SB 2807 (2025) requires any company carrying passengers or freight without a human driver to hold an authorization from the Texas Department of Motor Vehicles (TxDMV). The law took effect September 1, 2025, rules followed on February 27, 2026, and enforcement began May 28, 2026. Authorizations are free and do not expire, but TxDMV can suspend or revoke them for vehicles that endanger the public.
Digital Assets and Corporate Law
Bitcoin Reserve and Business Courts
Governor Greg Abbott signed SB 21 in June 2025, creating the Texas Strategic Bitcoin Reserve under the Comptroller, and the Legislature appropriated $10 million to it. The Comptroller made the first purchase, $5 million of BlackRock's iShares Bitcoin Trust (IBIT), in November 2025.
The Texas Business Court opened September 1, 2024, giving companies specialist judges for corporate disputes, and SB 29 (2025) rewrote parts of the Texas Business Organizations Code to court companies leaving Delaware. Tesla reincorporated in Texas in June 2024.
Record
Dataset Record
- Sources
- Office of the Texas Governor (Texas Enterprise Fund); Texas Comptroller; TxDMV Automated Vehicles Regulatory Program; City of Austin Economic Development Department; Texas Legislature Online
- Last verified
- Q4 2026