Solar and Wind Energy Business Franchise Tax Exemption

This program does not apply to homeowners. It is a tax incentive for commercial and industrial businesses—specifically companies engaged solely in manufacturing, selling, or installing solar or wind energy devices—that exempts them from Texas's franchise tax (equivalent to a corporate income tax) with no upper limit on the exemption.

If your company is engaged solely in manufacturing, selling, or installing solar or wind energy devices (including photovoltaics, solar thermal systems, and wind turbines), you qualify for a complete exemption from Texas franchise tax, which can represent substantial savings depending on your revenue scale. You must structure your business to focus exclusively on solar or wind energy work to maintain eligibility under this incentive.

This franchise tax exemption targets solar and wind energy businesses (manufacturers, sellers, and installers) in the commercial and industrial sectors, with no ceiling on the exemption amount, making it a significant recruitment tool for renewable energy companies. Eligibility requires that the company be engaged solely in solar or wind work; businesses must file annual franchise tax reports by May 15 and report revenue to demonstrate exclusive focus on eligible technologies. The exemption reduces state tax obligations without requiring separate applications—it is claimed through standard franchise tax filing.