Texas: The Lone Star State

According to ehuacom, Texas is located in the mid-south of the USA and is the state with the second largest area. The Lone Star State is divided into 254 counties. No other US state can boast as many. The border with Mexico in the south of the country accounts for roughly half of the borders between the two nations. With approximately 30 million people, Texas has the second largest population of any US state.

If Texas were its own nation, it would have the ninth largest economy in the world. Texas would rank ahead of countries like Australia or Russia. Whether it’s GDP, exports, population growth or job creation, Texas is the leading state in the US. These are already very good reasons for many companies to move to the “Lone Star State”. The excellent infrastructure with international access on all routes (land, sea and air) is in accordance with the outstanding importance. A low tax burden, reasonable cost of living and a predictable regulatory environment complete the ideal environment for entrepreneurs.

Texas Location Map

THE BEST STATE FOR BUSINESS

Unmatched access and high investment in infrastructure combined with the largest transaction funds in the United States create a favorable business climate that is also very tax friendly. This applies to both expanding and newly settling companies. Toyota, for example, moved its headquarters from California to Texas and Apple is building its new campus here. In addition to the giants mentioned that are moving to Texas, the “Lone Star State” is often also the birthplace of successful startups. Dell is just one example.

Texas was named Best State to Do Business by Chief Executive Magazine for the 17th year in a row. The results are based on an annual CEO survey. The size or industry of the company does not play a role, but rather the minimum. If you want to make it big, you choose Texas as a location. It almost seems like a logical conclusion that Texas was voted the state with the most small business jobs in 2021.

HISTORICALLY INNOVATIVE

Advances in aerospace (Johnson Space Center in Houston) are also part of Texas history, as are biomedical advances that include the first artificial heart transplant (Texas Heart Institute). Texas plans to continue making history with cutting-edge research at the Texas Biomedical Research Institute. In general, Texas cities are among the top innovators in technological fields.

OUTSTANDING WORKFORCE – TODAY AND IN THE FUTURE

Texas not only has the second largest population and labor force, it also has the best educated workforce. This is shown by work and education data. These are one of the keys to Texas economic success.

The management staff of the companies not only pay attention to covering the current talent needs, but also think in perspective. Looking to the future need not worry any decision-maker, because significantly more young people are enrolled at universities in Texas compared to other states. An overview of the number of graduates also speaks a very clear language and shows that Texas has 88% more graduates than Florida and even 100% more than New York.

TOP EXPORTER AS TRADITION

No other state in the US handles nearly as much cargo as Texas. This was revealed by a data analysis by CNBC. Texas, as the country’s largest exporter, has been greeting from the top for 19 years. The central location, the easily accessible ports and high investments in the road, rail and air transport network make this success possible.

A growing pool of highly skilled workers, low taxes, and competitive incentives—there’s a lot bigger and better in Texas.

TEXAS INCOME TAX

Texas does not levy an income tax. However, there are federal income taxes to be paid.

CORPORATE INCOME TAX IN TEXAS

Texas does not collect a corporate tax. However, corporation tax has to be paid in the federal government.

TEXAS SALES TAX

There is no sales tax or Value Added Tax (VAT) in the USA based on the European model. Instead, in the United States, states, counties, and municipalities levy a local sales tax on the sale of products (but not services).

Sales tax rate in Texas

The sales tax in Texas is 6.25% at the state level. Municipalities or districts charge an average of 1.94% sales tax. Combined, an average of 8.19% is due.

Texas Nexus Laws & Sales Tax

Learn more about the Economic Nexus Laws in the context of Sales Tax here.

Effective Date

October 1, 2019

Transactions included:

Gross receipts from sales of tangible personal property and services to the American state (i.e. total Texas sales)

Treatment of tax-exempt transactions:

Exempt Sales and Exempt Services are included in the threshold

Reason:

Sale only

Sales/Transactions Threshold:

$500,000

Evaluation period:

The threshold is for the trailing 12 months, with the first 12 calendar months beginning July 1, 2018 through June 30, 2019.

Extra information:

  • Registration Requirements: A remote business must register with the Texas Comptroller no later than the first day of the fourth month following the month in which it exceeded the Economic Nexus Threshold. See 34 Texas Administrative Code §3.286 for more details
  • Resources for sellers by Wayfair
  • HB 2153

Texas Marketplace Sellers & Sales Tax

Learn more about Marketplace seller registration requirements

Effective date by the marketplace broker:

October 1, 2019

Economic Nexus Threshold:

More than $500,000 in gross sales in Texas in the current or previous calendar year. Remote sellers should include sales made through a marketplace when calculating the threshold. Marketplace intermediaries don’t have to calculate the threshold – they all have to collect and repel taxes on third-party sales.

Registration requirements:

  • Remote Multichannel Sellers: You must register with the Texas Comptroller of Public Accounts and collect Texas Use Tax on sales not taxed by a Marketplace Agent once you have crossed the Economic Nexus Threshold.
  • Remote Marketplace Vendors: You must register if you cross the Economic Nexus Threshold. Contact the Texas Comptroller for more information.
    • You can request the filing of annual returns.
  • In-State Multichannel Sellers: You must register with the Texas Comptroller and collect tax on sales that are not taxed by a marketplace intermediary.
  • State Marketplace Sellers: You must register. Contact the Texas Comptroller for more information.
    • You may also have franchise tax obligations after the Franchise Tax Economic Nexus went into effect on October 1, 2019.