State Taxes

Texas has no state payroll tax, no personal income tax, no corporate income tax, and no unitary tax. Texas is one of only two continental states with no gross receipts tax.

Texas businesses pay franchise tax, unemployment insurance tax, ad valorem (property) tax, and sales tax.

Franchise Tax

Franchise tax is based on a corporation's taxable capital and earned surplus. The current rate for taxable capital is 0.25% for the privilege period. The tax rate for earned surplus is 4.5%. The amount taxable on both is determined by gross receipts from business done in Texas, divided by gross receipts from all business done in and out of the state.

Unemployment Tax

All Texas employers pay state unemployment tax. A new employer is taxed at 2.7% of the first $9,000 on individual earnings for at least six quarters to establish an experience rate. After that time, the employer may qualify for a rate adjustment.

Ad Valorem Taxes

Ad valorem taxes are levied by all applicable local taxing authorities based on a property's market value on January 1 of the tax year. Properties may qualify for special exemptions on valuation if a valid application is filed by April 30. Texas businesses do not pay an inventory tax, but inventory is taxed as personal property.

Sales Tax

Exemptions to the state sales tax include tangible property which will be a component part of a manufactured product or consumed in processing, sales delivered out of state, and a number of other items, including food.

To view more comprehensive details pertaining to Property Taxes for the area view the following document:

 Property Tax Rates