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Friday, April 18, 2014

Forbes: "Only Things Not Bigger in Texas are Taxes"

The Lone Star State's lack of individual income tax has long been a large attraction for citizens. Being one of only seven states without a personal income tax, it absolutely outshines states like Hawaii, which holds a staggering income tax burden. Plus, with 52 Fortune 500 companies in the state, and 12.9 million men and women making up its workforce, Texas is keeping-- and building-- its track record for being among the most important business hubs in the nation.

Business Owners Choose to Partner with Texas and Its Booming Economy

Certainly there are dozens of things that contribute to Texas' booming economy. Two of the most significant ones? The state's tax system and the multiple tax incentives that Texas grants to businesses. Actually, the Lone Star State has some of 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 out its franchise business tax in 2008 with a framework that more precisely mirrored the structure of establishments and helps the state continue to be a competitive player in the U.S. economy.

The amended margins tax replaced an old franchise business tax that was actually created at a time when the state's overall economy was driven by products rather than services. With the new law, the primary franchise business tax rate plummeted from 4.5 % to around .5 and 1 %. Additionally, an exemption is granted to companies with a profit below $1 million-- a resolution that helps 40,000 small companies in Texas.

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

A Perfect Business Partnership: Joe Garza Explains Why

"Texas provides a variety of tax incentives to its small companies" says Joe Garza - Tax Lawyer and Lead Partner at Garza & Harris. "Incentives are given for everything from manufacturing to contamination control to renewable energy - these incentives make Texas a solid partner for business owners operating in-state". For example, privilege from state sales and use tax on natural gas and electricity are granted to manufacturers. Furthermore, firms that take advantage of renewable energy programs, such as solar and wind power, are entitled to for a variety of tax exemptions. Permissions such as these can really add up for business owners seeking to sustain and become a prosperous business in Texas.

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