| (C) the comptroller shall assess the qualified business that portion of the refund attributable to any decrease in employment, plus penalty and interest from the date of the refund. (8) An enterprise project must retain records substantiating each claim for refund. The records must be verifiable by audit and include copies of invoices showing the item purchased, the date of purchase, amount of
purchase, the amount of tax paid, and the identity of the seller. The records must also show that the machinery and equipment and building materials purchased are for use within the zone. Employment records must also be kept verifying the number of new jobs created. (d) Defense economic readjustment zones. (1) Definitions applicable to subsection (d) only: (A) Defense readjustment project--A person designated by the Texas Department of Economic Development as a defense readjustment project under the Government Code, Title 10, Subtitle G, Chapter 2310. (B) Qualified business--A person certified as a qualified business under Government Code, §2310.302. (C) Qualified employee--A person who: (i) works for a qualified business; and (ii) performs at least 50% of the person's service for the business in the readjustment zone.
(D) Readjustment zone--An area designated as a defense economic readjustment zone under the Government Code, Chapter 2310. (2) Tax refunds for defense readjustment projects. (A) A defense readjustment project is eligible for a refund in the amount provided by this section of the state sales and use taxes imposed by this chapter on purchases of: (i) equipment or machinery sold to a defense readjustment project for use in a readjustment zone; (ii) building materials sold to a defense readjustment project for use in remodeling, rehabilitating, or constructing a structure in a readjustment zone; (iii) labor for remodeling, rehabilitating, or constructing a structure, not qualifying as a new construction, by a defense readjustment project in a readjustment zone; and (iv) electricity and natural gas purchased and consumed in the normal course of business in
the readjustment zone. (B) Subject to the limitations provided by subparagraph (C) of this paragraph, a defense readjustment project qualifies for a refund of taxes under this section of $2,500 for each new permanent job or job that has been retained by the defense readjustment project for a qualified employee. (C) The total amount of tax refund that a defense readjustment project may apply for in a state fiscal year may not exceed $250,000. If a defense readjustment project qualifies in a state fiscal year for a refund of taxes in an amount in excess of the limitation provided by this subsection, it may apply for a refund of those taxes in a subsequent year, subject to the $250,000 limitation for each year. However, a defense readjustment project may not apply for a refund under this section after the end of the state fiscal year immediately following the state fiscal year in which the defense readjustment project's designation as a defense
readjustment project expires or is removed. The total amount that may be refunded to a defense readjustment project under this section may not exceed the amount determined by multiplying $250,000 by the number of state fiscal years during which the defense readjustment project created one or more jobs for qualified employees. (D) Only qualified businesses that have been certified as eligible for a tax refund under this section by the Texas Department of Economic Development to the comptroller and the Legislative Budget Board are entitled to the tax refund. (E) To receive a state tax refund under this section, a defense readjustment project must apply to the comptroller for the refund. A refund request submitted to the comptroller must: (i) be in writing in a format prescribed by the comptroller; (ii) be accompanied by copies of the certification by the Texas Department of Economic Development;
(iii) list each qualifying item purchased, the name of each seller, invoice or contract number, dollar amount of each purchase, and amount of state tax paid on each purchase. (F) A defense readjustment project applying for a refund of state taxes under this subsection must retain records substantiating each claim for refund. The records must be verifiable by audit and include copies of invoices showing the item purchased, the date of purchase, amount of purchase, the amount of tax paid, and the identity of the seller. The records must also show that the qualifying taxable items purchased were for use within the zone. Employment records must also be kept verifying the number of new jobs created or retained. (G) For possible local tax abatements, see the Government Code, §2310.405.
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