Top 5 Things Distributors Need To Know About The Triple Freeport Exemption

November 28, 2017
Strategy & Solutions


Top 5 Things Distributors Need To Know About The Triple Freeport Exemption

By Ward Richmond & Liam Logan

The other day, we were sitting in our weekly Monday morning team meeting and one of our newest team members, GSW Submarket specialist, Liam Logan, asked me, “What are all of the benefits of Triple Freeport?”

My eyes immediately glazed over.

I responded with: “Did you ever think about the fact Liam Logan might be one of the best “sales guy” names ever?!”

In case you didn’t know: Talking about tax exemptions is not something I typically like to do! Who does? Nevertheless, our Team’s new MO is that if we don’t really know the answer to something, we are going to figure it out and write a motherflippin’ blog about it!

We hope you enjoy our take on the Triple Freeport exemption and find this informative and helpful!

  • What in the H Does “Triple Freeport” Mean?

Slow down there, Chief. Let’s start with “What does Freeport mean?”

Administered by the Texas Comptroller of Accounts, the Freeport Exemption is a business personal property tax exemption on inventory that is held within the State of Texas for 175 days or less from the date they were manufactured in, acquired in or transported into the State.

Ok, so now, let’s investigate the original question, “What does “Triple Freeport” mean?”

The tax break offered by the Freeport Exemption can be most valuable to distributors when their industrial property falls within a Triple Freeport zone. This provides qualified distributors with inventory tax exemptions at the 1) City, 2) County and 3) School District levels.

Get it? In a Triple Freeport zone, there are three different taxing entities that provide you with an exemption, hence the “Triple” in “Triple Freeport.” If it were up to me, this would be called “The Jackpot Zone” because you have the ability to get a tax break from all three local tax authorities!

If you happen to be wondering, “Why in the world would they provide me with a tax break?” You must not be from Texas. In Texas, we are extremely pro-business and we like to look at the big picture. This is just another great reason for you to consider opening up your new distribution hub in the great state of Texas!

  • Where Do These Magical Triple Freeport properties exist?
  • Easy answer to this is question: Call Ward Richmond & Liam Logan. We got this!
  • DIY Answer: First, you must have a facility that is located in the great State of Texas. It’s a Texas thang, you wouldn’t understand. Triple Freeport zones are typically found near airports or highly industrial/high traffic areas for interstate commerce. Each county appraisal district or assessor’s office has a list of jurisdictions that allow the exemption.
  • Can You Benefit From Triple Freeport Exemption?

Sometimes we like to answer questions with questions!

  • Does your company have inventory that will sit in the warehouse for less than 175 days before you distribute it outside of the State of Texas?

If you answered YES, you’re lookin’ good!

  • Does your inventory consist of “finished goods, supplies, raw materials, work in process?”

YES? You’re almost there!

  • Is your inventory used for “assembling, storing, manufacturing, repair, maintenance, processing or fabricating?”

Did you answer YES to Questions 1-3? WINNER WINNER CHICKEN DINNER!

  • Does your inventory have anything to do with oil or petroleum or natural gas?

SORRY PAL- You Just qualified for the GIANT ZERO Freeport Exemption and you are paying those inventory taxes. That’s OK though because you oil barons make enough money as it is!

Fun Fact For Qualifying Tenants: Although Tenant’s can greatly benefit from the Freeport Exemption, Landlord’s do not typically charge a premium for space located within these jurisdictions. Furthermore, developers are typically not charged a premium for land that falls within these jurisdictions.

  • How Much Money Can You Save If You Qualify For Triple Freeport?

Drumroll………. It depends. If you are transporting goods (not gasoline, etc.) from your Texas warehouse to somewhere outside of the State of Texas in less than 175 days then you can do one of the following to calculate your potential tax exemptions:

  • Easy answer to this is question: Call Ward Richmond & Liam Logan. We got this!
  • DIY Answer: Take the $ Amount of your Inventory that qualifies for exemption and multiply it by the tax rate of the city, county and school district (assuming you are Triple Freeport) and you’ve got your number.

Example: $10,000,000 x 1.2% = $120,000 in savings! Boom! We may have just saved you $120K!

  • What is the process for a Tenant to qualify for Triple Freeport?

Despite what we just told you, Freeport tax exemptions do not magically appear out of thin air.

Like anything else related to taxes and the government and “Obama”, you need to fill out forms.

Depending on how many square feet you lease, Liam might offer to help you fill out these forms if you let him represent you but you’re probably better off calling someone like The Kurz Group (add link) to help with the application process which must take place each year if you want to keep your tax breaks in place.

Additional information can be found at or the folks at Kurz Group, Inc. who wrote this awesome blog where we gathered a lot of this information:

Our team at Colliers International works closely with tenants and developers around the globe to develop and execute world-class real estate strategies utilizing our global team of logistics and transportation real estate specialists. Our team provides best in class Site Selection services including Supply Chain Consulting, Labor Analytics, Build-to-Suit Project Management and Economic Incentive Negotiation services.