How Midland’s Sales Tax Fuels Economic Growth and Diversification

When residents and visitors make purchases in Midland, Texas, every dollar spent contributes to the community's future.

How?

Through the Midland Development Corporation’s (MDC) funding structure. The MDC is funded through a dedicated portion of local sales tax revenue and receives no property tax funding. From this sales tax revenue alone, the MDC drives economic development, creates high-quality jobs, and attracts strategic investments to the region.

How Sales Tax Works in Midland

Understanding how sales tax dollars are allocated helps highlight the direct relationship between local shopping and economic development.

On a $100 taxable purchase made in Midland, the total sales tax paid is $8.25.

Out of that total, the MDC receives a dedicated quarter-cent portion: one-fourth of 1 cent per taxable dollar spent. Going back to the example above, the MDC receives 25 cents for every $100 spent by consumers buying in Midland.

The remaining portion of the sales tax ($8 from the example) is distributed among other taxing entities, including the state, city, county, and hospital district.

All Midland commerce contributes to sales tax, including visitors from outside Midland and businesses transacting with one another. 

It’s important to note that not every purchase is subject to sales tax. Everyday essentials such as fresh and frozen produce, meat, dairy, bread, bottled water, and household groceries are non-taxable. Taxable food items primarily consist of prepared foods (such as restaurant meals, fast food, and hot prepared meals), soft drinks, and alcoholic beverages.

What the Sales Tax Funds

By reinvesting its dedicated quarter-cent sales tax, the MDC strengthens the local economy in the following ways:

• Infrastructure: Developing new roads and utility networks that support regional growth.
• Business Retention & Expansion: Supporting projects that create and retain jobs.
• Education & Workforce Training: Funding programs to prepare Midland workers for emerging and existing industries.
• Economic Diversification: Investing in target industries beyond traditional oil and gas.

Since 2016, the MDC has invested or committed $197 million, which in turn has helped leverage an additional $749 million in private and external investments that would not otherwise have been brought to Midland.

Sales Tax Investments in Action

The power of this sales tax reinvestment is seen in several landmark projects transforming the city.

Infrastructure Projects

Since 2016, the MDC has committed over $45 million for infrastructure projects.

For example, the MDC invested $974,060 toward the Loop 250-Todd Drive improvements. This investment, combined with nearly $26 million in state funding, accelerated the project’s timeline by about six years, delivering better connectivity, improved mobility, and infrastructure necessary to support Midland’s continued growth.

Costco Midland

The MDC provided a $6.5 million reimbursement for infrastructure and site improvements around the new wholesale retail warehouse facility, including the extension of Sinclair Avenue and the construction of Kirkland Drive. This infrastructure serves not only Costco, but all surrounding commercial development. 

Costco adds a major retail destination, keeps shopping dollars local, attracts visitors from neighboring communities, and supports further development along the SH 191 corridor.

AST SpaceMobile Expansion

AST SpaceMobile’s new 400,000+ square-foot satellite manufacturing and production facility in Midland requires over a $100 million taxable capital investment through 2034 and will create 1,800 full-time jobs with a $144 million annual payroll at full buildout. This expansion is projected to contribute approximately $1 billion annually to Midland’s GDP.

AST brings high-skill jobs and advanced satellite manufacturing to the region, helping diversify Midland’s economy beyond traditional energy sectors.

Economic Growth and Diversification Driven By You

By shopping locally in Midland, residents directly fund the infrastructure, workforce training, and business recruitment efforts that keep the local economy strong, resilient, and diversified for generations to come.

If you have any follow-up questions on how this sales tax works in Midland or would like more information on the projects mentioned above, please connect with our team.