The Texas tax burden, at 7.9% of income is well below the national average of 9.8%. there is no state income tax, which leads to higher sales and property taxes. There are also property taxes that must be given consideration. Tax returns are due on April 15.
Texas state sales/use tax – 6.25%, prescription and non-prescription drugs and non-prepared food exempt, local sales tax can add 2%.
Texas personal income tax
There is no state income tax
Texas excise taxes
Taxes will be assessed on alcohol, tobacco, gasoline and other miscellaneous items, at the discretion of the state.
- $1.41 per package of 20 cigarettes
- $2.40/gallon on spirits
- $.204 per gallon on table wine
- $.20 per gallon of beer
- Fireworks are taxed at 2% + sales tax, which funds rural fire departments
- $.24/gallon on gasoline
Texas inheritance/estate tax
Only federal laws are in effect. No state estate tax has been collected on deaths after Jan 1, 2005. There is no Texas inheritance tax.
Texas payroll taxes
State Disability Insurance – none
State Unemployment Insurance – 0.66% to 8.25%, wage base is $9,000. New employer contribution is 2.7%. Construction employers use 5.4%.
State minimum wage follows federal standards.
Texas state property tax
Texas does not impose a property tax, but cities, counties and school districts will. Vehicles that do not produce income are exempt from taxation. Intangible property is not taxed. There is a homestead exemption available for homeowners that live in their property as a primary residence. Property taxes are comparatively higher to other states due to the absence of personal income taxes.
Texas state corporate tax
Although Texas does not levy a corporate income tax, there is a tax on gross receipts called the Texas margins tax. Texas is only one of five states that has a gross receipts tax in lieu of a corporate tax rate.
There is a $10,000 property tax exemption to the property’s assessed value for school district taxations. This can be in addition to a $15,000 homestead exemption. $3,000 will be exempt from all other local taxes. School distract taxes are frozen for seniors and the disabled.The tax ceiling on properties that undergoes renovations is dropped to compensate for the cost of renovations and increased value of the property.