Regular readers of Tax Foundation reports know that we publish estimates of the distributional impact of federal tax changes: that is, we estimate how a tax reform might affect the after-tax incomes of taxpayers at...
The facts on Texas’ Tax Climate
0%Individual Income Tax
GRTCorporate Income Tax
$1,559Property TaxCollections Per Capita
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.
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.
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.
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.
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.
Texas's State and Local Tax Burden Ranks 46th
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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