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Friday, April 18, 2014

Joe Garza: "Small Businesses Want to Partner with Texas"

Texas' lack of professional income tax has certainly been a huge plus for new prospective citizens. As one of only 7 states without any a personal income tax, it surely surpasses states like New York, which possesses a shocking income tax burden. Also, with 52 Fortune 500 companies in the state, and 12.9 million individuals constituting its labor force, Texas is preserving-- and growing-- its own track record for being among the most critical business hubs in the nation.

Certainly there are lots of things that contribute to Texas' booming economic condition. Two of the most significant ones? The state's tax system and the multiple tax incentives that Texas offers to businesses. As a matter of fact, the Lone Star State has some of the most affordable tax burdens in the U.S.A Here's a closer look at the policies that make Texas such a business-friendly place.

Because of the Texas Tax Reform Commission, Texas switched out its franchise tax in 2008 with a design that more accurately matched the structure of small companies and helps the state remain a tough player in the U.S. economy.

The amended margins tax replaced an archaic business tax that was really developed at a period when the state's economy was driven by products rather than services. With the latest law, the main franchise tax rate declined from 4.5 % to between .5 and 1 %. Further, an exemption is given to local business with a profit below $1 million-- a decision that helps 40,000 local business in Texas.

The biggest initiative of this kind in the U.S., The Texas Enterprise Fund was developed to draw in out-of-state companies by incentivizing job creation and capital investment. Comprising greater than $410 million, the fund provides awards ranging anywhere from $194,000 to $50 million to qualified companies. The Texas Enterprise Fund has drawn in such organizations as Bank of America, Fidelity Global Brokerage, Lockheed Martin and Frito-Lay. It has also contributed to a large tech influx in Austin where firms like Apple, Facebook, Sematech, and Samsung have recently set up shop.

"Texas offers a diversity of tax incentives to its businesses" says Joe Garza - Tax Planning Lawyer and Lead Partner at Garza & Harris. "Incentives are offered for everything from manufacturing to air pollution control to renewable energy - these incentives make Texas a rock-solid partner for business owners operating in-state". For instance, exemption from state sales and use tax on natural gas and electricity are provided to manufacturers. Likewise, companies that utilize renewable energy programs, such as solar and wind power, are qualified for a number of tax exemptions. Permissions like these can seriously add up for business owners striving to sustain and expand a prosperous company in Texas.

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