The Lone Star State's lack of individual income tax has definitely been a major draw for citizens. Among of only 7 states without a personal income tax, it surely surpasses states like Iowa, which has a shocking income tax burden. Additionally, with 52 Fortune 500 companies in the state, and 12.9 million men and women constituting its workforce, Texas is sustaining-- and building-- its reputation for being among the most critical business hubs in the united states.
The Price is Right with Texas Tax Law
Right now there are dozens of factors that benefit Texas' flourishing economic situation. Two of the most significant ones? The state's tax design and the multiple tax incentives that Texas offers to small companies. As a matter of fact, the Lone Star State has among the smallest tax burdens in the U.S.A Here's a closer look at the regulations that make Texas such a business-friendly place.
As a result of the Texas Tax Reform Commission, Texas changed its franchise business tax obligation in 2008 with a structure that more precisely matched the structure of businesses and, according to Forbes online, helps the state continue being a more competitive player in the U.S. economy.
The reworked margins tax took over an archaic franchise tax that was developed at a time when the state's overall economy was directed by products rather than services. Under the latest law, the main franchise tax rate dropped from 4.5 % to between .5 and 1 %. Further, an exemption is granted to small businesses with a revenue below $1 million-- a decision that helps 40,000 small businesses in Texas.
The primary initiative of this kind in the U.S., The Texas Enterprise Fund was designed to attract out-of-state businesses by incentivizing job creation and capital investment. Comprising over $410 million, the fund extends awards ranging anywhere from $194,000 to $50 million to qualified businesses. The Texas Enterprise Fund has acquired such businesses as Bank of America, Fidelity Global Brokerage, Lockheed Martin and Frito-Lay. It has also contributed to a significant technological influx in Austin where corporations like Apple, Facebook, Sematech, and Samsung have just recently set up shop.
A Smart Partnership
"Texas offers a variety of tax incentives to its own businesses" remarks Joe B. Garza - Attorney and Chief Partner at Garza & Harris. "Incentives are offered for everything from manufacturing to contamination control to renewable energy - these incentives make Texas an excellent partner for business owners operating in-state". For example, privilege from state sales and use tax on natural gas and electricity are offered to manufacturers. Also, firms that utilize renewable energy programs, such as solar and wind power, are entitled to for a number of tax exemptions. Concessions such as these can truly add up for business owners striving to support and expand a prosperous business in Texas.