With the end of the year coming up, business owners and individuals alike are in the process of collecting their receipts, invoices, etc. in anticipation of the new tax season. For those of us who live in Houston, the surrounding areas, or Texas in general, there are a few benefits to living in the area. Below is a list of the five things everyone new to Texas or taxes should know.
5 Texas Taxes
1. No state income tax – While the fed certainly takes it share of individual income taxes, including Social Security and Medicare, the state does not. While some may praise their favorite governor for not subjecting them to this burden, it is actually part of the state’s constitution. So if you live in Houston and are wondering if you have to file for state income taxes, the short answer is no.
2. Sales tax – But as with many states, there is a sales tax. The official state sales tax is 6.25%, but those living in Houston will tell you it’s 8.25%. This is because the city/county adds another two percent on top of the state sales tax. To give you an idea of how it stacks up to other states, Delaware has no state sales tax and doesn’t even add local ones. Indiana, Mississippi, and New Jersey have a seven percent state sales tax.
3. Property tax – While most of you homeowners will get a statement from Harris County if you live in Houston outlining your local property tax, there is no state property tax. The local authorities also give residential homestead exemptions to homeowners older than 65 or who are disabled.
4. Estate tax – Where you named in someone’s last will and testament this year? There is no state estate tax, or as it is more commonly known, the death tax. The federal laws may be changing regarding this tax, but neither the city of Houston nor state of Texas will lay claim to these earnings.
5. Firework tax – One of the more peculiar of Texas and Houston taxes is the firework tax, which is exactly what it sounds like. It simply a two percent tax collected from retailers who sell fireworks. This tax is collected to help rural fire departments.
More on Houston Taxes and Texas
And remember there are tons more tax deductions out there for businesses and individuals. If you live in Houston or the surrounding area and need help with taxes or bookkeeping, please give us a call.