Texas

The facts on Texas’ Tax Climate

Texas's Individual Income Tax System
Texas levies no individual income tax, joining six other states with the same policy: Alaska, Florida, Nevada, South Dakota, Washington, and Wyoming.

50-State Table of Individual Income Tax Rates

Texas's Corporate Income Tax System
Texas levies no corporate income tax but does have a modified gross receipts tax called the Margin Tax, with rates ranging from 0.331 percent to 0.75 percent.

50-State Table of Corporate Income Tax Rates

Texas Sales and Excise Taxes
Texas levies a 6.25% general sales or use tax on consumers, which is above the national median of 5.95%. The average local sales tax rate is an additional 1.9%. Texas's state and local governments collect $1,231 per person in general sales taxes and $568 per person in excise taxes, for a combined figure of $1,800, which ranks 9th highest nationally. Texas's gasoline tax stands at 20 cents per gallon, 42nd highest nationally, while its cigarette tax stands at $1.41, 26th highest nationally.

50-State Table of State and Local Sales Tax Rates

Texas Property Tax Collections Relatively High
Texas's state and local governments collected approximately $1,559 per person in property taxes in 2012, which ranks 14th highest nationally.

For 50-state tables of property tax collections, visit our latest web edition of Facts & Figures, or download our mobile app for Apple and Android.

Tax Freedom Day Arrives on April 17th in Texas

Tax Freedom Day is the day when Americans have finally earned enough money to pay off their total tax bill for the year. In 2016, Texas taxpayers have to work until April 17th (20th earliest nationally) to pay their total tax bill.

Full study of Tax Freedom Day, nationwide and in each state

Texas's State and Local Tax Burden Ranks 46th

Texas's 2012 tax burden of 7.6% ranks 46th highest in the nation, and is below the national average of 9.9%. Texas's taxpayers pay $3,340 per capita in state and local taxes.

Texas' State-Local Tax Burden, 1977-Present

State-Local Burden Rankings (full study)

Texas's 2016 Business Tax Climate Index Ranks 10th

Texas ranks 10th on the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes (41st), individual income taxes (6th), sales taxes (37th), unemployment insurance taxes (15th), and taxes on property (34th), including residential and commercial property.
State Business Tax Climate Index (full study)

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