Yes — a PILOT can exist without a tax abatement — but it’s important to understand what that really means, because it works very differently than most people assume. This explainer focuses on how PILOTs work in Texas, especially at the county level. What is a PILOT? A PILOT is a Payment In Lieu Of Taxes. It is not a tax. It is a voluntary payment a company agrees to make by contract. ...
A Reinvestment Zone is a defined geographic area created by a local government to make a property eligible for certain economic incentives, most commonly tax abatements under Texas law. A reinvestment zone does not reduce taxes by itself, but it is a required first step before a county can even consider a tax abatement. What a reinvestment zone does (in simple terms) Think of a reinvestment zone as turning a switch from “not eligible” to “eligible.” ...
A tax abatement is an agreement where a local government (like a county) temporarily reduces or waives some portion of property taxes on a new project to encourage development. Think of it like this: the county is offering a discount on taxes in exchange for promises the company makes (investment, jobs, infrastructure, community benefits, etc.). What a tax abatement is (simple definition) A tax abatement typically reduces the taxable value of certain improvements (often new construction and equipment) for a set period of time. ...