Freeport Tax Exemption

Category: Local Incentives

Freeport Tax Exemption is offered by the Midland County, City of Midland, and the Hospital District.  The Freeport exemption exempts certain types of tangible personal property (i.e., inventory) from ad valorem (property) taxation provided the property is:

  • Acquired in or imported into Texas to be forwarded out of state
  • Detained in Texas for assembling, storing, manufacturing, processing, or fabricating purposes by the person who acquired or imported it; and
  • Transported out of state within 175 days after the date the person acquired or imported it into Texas

Because oil, natural gas, and other petroleum products are not considered Freeport goods, they are not eligible for the exemption, and, therefore remain taxable.  Even when goods are sold to an in-state purchaser rather than shipped out of the state, they may qualify for the Freeport exemption - however, the property must qualify under the above requirements as Freeport property and must be transported out of the state within 175 days after it was first acquired in or imported into the state.