Texas Property Tax: Everything You Need to Know

Does Texas have property tax?
Does Texas have a state property tax? No. Texas has only local property taxes levied by local taxing units. The state does not have current local tax records on each property and its ownership and does not set your property’s value for property taxes.
Read more on comptroller.texas.gov

Texas is renowned for its hospitable business climate and lack of a personal income tax, but is there a property tax there as well? Yes, it is the answer. One of the main ways the state finances local government services is through property taxes.

Texas has different property tax rates for each county, which are set by local governments such cities, counties, school districts, and special districts. Texas often has some of the highest property tax rates in the country. Texas has the sixth-highest property taxes in the US, according to the Tax Foundation.

Real estate, personal property, and commercial property all have a property tax assessed in Texas. Land, structures, and any alterations to the property are all considered to be real estate. A few examples of personal property are automobiles, yachts, and aircraft. Assets like as furniture, merchandise, and equipment are all considered to be business property.

Another tax to which companies doing business in the state may be liable is the Texas Franchise Tax. The franchise tax is based on a company’s taxable margin and is a levy on the right to conduct business in Texas. The lowest of three calculations—70% of total revenue less cost of goods sold, total revenue less salaries and benefits, or total revenue less $1,000,000—represents the taxable margin.

For the majority of firms, the Texas franchise tax rate for 2021 is 0.375%. Businesses with annual revenues under $1,180,000 are exempt from the franchise tax, nevertheless. Furthermore, other sorts of companies, including organizations and specific kinds of partnerships, might also be exempt.

Finally, Texas does have a property tax, which is one of the main ways that the state pays for local government services. County-specific property tax rates range from among the highest in the country. The Texas Franchise Tax, which is a tax on the right to conduct business in the state, may also apply to companies based in Texas. The 2021 Franchise Tax rate is 0.375%, and some business categories may qualify for an exemption from the tax.

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