Texas's 2013 Business Tax Climate Index Ranks 9

Texas's 2013 Business Tax Climate Index Ranks 9

Texas ranks 9th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes, individual income taxes, sales taxes, unemployment insurance taxes, and taxes on property, including residential and commercial property. The ranks of neighboring states are as follows: New Mexico, 38th, Oklahoma, 35th, Arkansas, 33rd, and Louisiana, 32nd.

Tax Freedom Day Arrives on April 10th in Texas

Tax Freedom Day Arrives on April 10th in Texas

Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2013, Texas taxpayers worked until April 10th (20th earliest nationally) to pay their total tax bill. The Tax Freedom Days of neighboring states are: New Mexico, April 3rd (ranked 5th earliest nationally); Oklahoma, April 6th (ranked 9th earliest nationally); Arkansas, April 7th (ranked 12th earliest nationally); and Louisiana, March 29th (ranked 2nd earliest nationally).

Texas has one of Lowest Tax Burdens in United States

Harlingen, TX has many benefits for prospective businesses. One major consideration for any employer is the cost of doing business and the State of Texas boasts great benefits for taxpayers.

• Texas has one of the lowest tax burdens in the U.S., 28 percent less than the national average.
• Texas has no personal or corporate income tax.
• There is no state tax on property used for pollution control.
• There is no state tax on goods in transit.
• There is no state tax on machinery and equipment utilized in manufacturing.

Harlingen, Texas, with no personal income tax, low property tax rates and its close location to the U.S.-Mexico border is poised for rapid growth and economic development.

Sales and Use Tax

Sales and Use Tax

Texas levies a sales and use tax of 6.25 percent on all retail sales, leases, and rentals of most goods, as well as taxable services. Additionally, cities, counties and other taxing jurisdictions may add to the rate for a combined state and local rate of 8.25 percent.
Sales and use tax exemptions are offered on machinery and equipment used in the manufacturing process and on natural gas and electricity when sold to commercial businesses that are "predominantly" manufacturing.

The Comptroller of Public Accounts is charged with the administration and collection of state and local sales tax from businesses operating in Texas, and also collects any franchise taxes owed by Texas corporations. The Comptroller maintains field offices in most major Texas cities to provide assistance and aid in complying with tax regulations.

Franchise Tax

Franchise Tax

In 2008, Texas replaced its franchise tax with a margins tax in order to establish a broader, fairer tax assessed at a lower rate. The goal of the reformed tax was to provide a level playing field for all businesses, to have a broad base that includes all business entities that receive liability protection from the state, to be competitive with other states to maintain Texas' reputation for having one of the best business climates in America, and to reflect the realities of a rapidly evolving economy. The reformed margins tax lowered the primary franchise tax rate to 1 percent on gross receipts for most taxable entities, and 00.5 percent for retailers and wholesalers (less compensation or cost of goods sold). Sole proprietorships, general partnerships, businesses with revenue under $1,000,000, and businesses whose total tax liability is $1,000 or less are exempt.
Under the reformed tax, businesses are rewarded for making good business choices. Every time a business puts a Texan to work, pays for health insurance, or invests in a pension plan, their tax liability decreases. The tax also penalizes bad business practices, such as hiring illegal immigrants.
These fair changes to the business tax code continue to stimulate our state's economy and encourage the entrepreneurial spirit that sets Texas apart.

Texas Workforce Commission

Employment Taxes

The Texas Workforce Commission collects all unemployment taxes for workers employed in Texas. For information regarding these taxes, to obtain a state employer's identification number, and for information on tax credits, contact:
Texas Workforce Commission
Tax Department
101 East 15th Street
Austin, Texas 78778

• New Employer Accounts/Status of Accounts: (512) 463-2731 or (800) 832-9394
• Quarterly Reports and Rates: (512) 463-2407
• Unemployment Insurance Customer Service: (512) 463-2542
• Labor Market Information: (512) 491-4922
• Work Opportunity Tax Credit (WOTC): (512) 463-2488 or (800) 695-6879

Business Tax Structure

Business Tax Structure 

State Taxes

With no corporate income tax and no individual income tax, Texas has one of the lowest tax burdens in the country, ranking as a Top 10 Best State in the Tax Foundation's 2013 State Business Tax Index.
The Comptroller of Public Accounts is charged with the administration and collection of state and local sales tax from businesses operating in Texas, and collects any franchise taxes owed by Texas corporations. The Comptroller maintains field offices in most major Texas cities to provide assistance and aid in complying with tax regulations. For further information on these taxes, contact:
Comptroller of Public Accounts
111 East 17th Street
Austin, Texas 78711
(512) 463-4600 or (800) 252-5555