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Friday, April 18, 2014

Texas Taxes: A Small Business' Best Partner

The Lone Star State' lack of self income tax has long been a major draw for citizens. Among of only 7 states without a personal income tax, it surely surpasses states like California, which possesses a surprising income tax burden. Additionally, with 52 Fortune 500 companies in the state, and 12.9 million men and women comprising its workforce, Texas is maintaining-- and strengthening-- its reputation for being among the most significant business hubs in the country.

Businesses form Partnerships with Texas

Certainly there are lots of factors that contribute to Texas' thriving economic state. Two of the most significant ones? The state's tax structure and the numerous tax benefits that Texas presents to small business. As a matter of fact, the Lone Star State has some of the most affordable tax burdens in the USA Here's a closer look at the policies that make Texas such a business-friendly place.

Because of the Texas Tax Reform Commission, Texas changed out its franchise business tax in 2008 with a design that more accurately reflected the structure of establishments and helps the state continue being a more competitive player in the U.S. economy.

The reworked margins tax took over an outdated franchise business tax that was really formed at a period when the state's economy was directed by products rather than services. Within the latest law, the primary franchise tax rate dropped from 4.5 % to between .5 and 1 %. Additionally, an exemption is presented to small businesses with a profit below $1 million-- a resolution that helps 40,000 small companies in Texas.

The largest initiative of this kind in the U.S., The Texas Enterprise Fund was developed to catch the attention of out-of-state companies by incentivizing job creation and capital investment. Comprising more than $410 million, the fund extends awards ranging anywhere from $194,000 to $50 million to suitable businesses. The Texas Enterprise Fund has drawn in such businesses as Bank of America, Fidelity Global Brokerage, Lockheed Martin and Frito-Lay. It has also promoted a large technology influx in Austin where companies like Apple, Facebook, Sematech, and Samsung have just recently set up shop.

Texas Taxes, A Big Draw for Companies

"Texas grants a diversity of tax incentives to its own small companies" states Joe Garza - Tax Planning Attorney and Head Partner at Garza & Harris. "Incentives are granted for everything from manufacturing to contamination control to renewable energy - these incentives make Texas a rock-solid partner for business owners operating in-state". For example, exemption from state sales and use tax on natural gas and electricity are granted to manufacturers. Also, enterprises that implement renewable energy sources, such as solar and wind power, are eligible for a range of tax exemptions. Permissions such as these can seriously add up for business owners striving to support and expand a prosperous business in Texas.