Taxes

Texas is Business Friendly, which is the mantra that translates into one of the best business climates in the United States.  The State of Texas does not have a property tax, an income tax, nor a unitary tax.  

Property Tax   

The State of Texas does not levy a state property tax on real and tangible personal property. All property is appraised at full market value and assessed on 100% of appraised value and inventory is taxed at the same rate.  

Business Personal Property Rendition

Sales & Use Tax 

The State of Texas levies a sales and use tax of 6.25 percent on sales of tangible personal property and certain services. Galveston County has no sales & use tax.  Also, no Sales and Use Tax is levied on water, wastewater or on labor used in new construction projects.

Entity	Sales Tax
State of Texas	6.25%
City of Hitchcock General	1.5%
City of Hitchcock Property Tax Reduction	0.5%
Total rate	8.25%

 

No Corporate & Personal Income Tax   

With no state or local corporate or individual income tax, Texas has one of the lowest tax burdens in the U.S. Texas also has no property tax at the state level as well no unitary tax.   
  

Texas Franchise Tax  

The Texas Franchise Tax is a privilege tax imposed on each taxable entity formed or organized in Texas or doing business in Texas.   Franchise tax rates, thresholds and deduction limits vary by report year

2026 and 2027
Item	Amount
No Due Threshhold	$2,650,000
Tax Rate (retail or wholesale)	0.375%
Tax Rate (other than retail or wholesale)	0.75%
Compensation Deduction Limit	$480,000
EZ Computations Total Revenue Threshold	$20 million
EZ Computation Rate	0.331%

 

Tax Rates, Thresholds and Deduction Limits for Prior Years

Texas Telecom Tax   

• 6.25%  

Texas Fuel Tax (Gas & Diesel)  

• 20% 

Unemployment Insurance 
  

Businesses that employ one or more individuals may be subject to the state unemployment tax. New employers pay 2.7% on the first $9,000 of wages per employee. A minimum of six quarters is required to obtain an experience rating in order to determine an employer's revised rate. The Texas Workforce Commission indicates that the effective tax rate in 2019 ranges from a minimum of 0.36% (paid by 65.6% of employers) to a maximum of 6.36% (paid by 5.3% of employers) for experienced-rated accounts and the average experience tax rate is 1.06%. 

Workers' Compensation   

Texas' workers' compensation is managed by the Division of Workers Compensation (DWC) of the Texas Department of Insurance. Workers' compensation is not mandatory in Texas.  The Texas Workers' Compensation Act limits a business' liability for job-related injuries if the employer has a workers' compensation policy from a licensed insurance carrier or has been certified to self-insure by the Texas Workers' Compensation Commission. Only companies specifically licensed to sell workers' compensation in Texas may legally offer such insurance. They may sell only the standard policy adopted by the Commissioner of Insurance. 

Hotel Occupancy Tax   

Entity	Sales Tax
State of Texas	6%
City of Hitchcock	7%
Total rate	13%