Tax Relief for Texans

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Tax Relief for Texans Estimator

While the federal government and some states are trying to figure out how to get their hands on every last taxpayer dollar, in Texas we’re trying to determine the best way to provide added tax relief. That’s because in Texas, we respect that it’s your money, not the government’s. You earned it – the government didn’t. And you, not the government, can be trusted to spend your money wisely. This page will give you a chance to see how much estimated tax relief each proposed cut can bring, and invites you to share your “tax relief formula” with Gov. Perry’s office. See how many and what type of cuts can net up to $1.8 billion in relief for Texas taxpayers.

Choose one or more of our tax relief methods below, not to exceed 1.8 Billion dollars.

Step 1: Choose Your Tax Relief Options

Personal Options

Lower the Sales Tax Rate from 6.25% to 6.00% ($1,000M*)

Currently, the State sales and use tax rate is 6.25%. State law allows localities to collect additional local sales and use tax of no more than 2%. Thus, the combined state and local rate may not exceed 8.25%. Lowering the State rate to 6.00% would reduce overall sales tax to no more than 8%. Note: Begins FY 2015.

Additional Sales Tax Holiday Weekend ($130M)

Current law provides a three day sales tax holiday in August for purchases of certain clothing, footwear, and specified items that cost less than $100 per item. The proposal would add another three day tax-free holiday.

Increase Homestead Property Tax Exemption by $5,000 per Year ($600M)

Currently, $15,000 of a home’s value is excluded from the school property tax calculation. The proposal would exempt an additional $5,000, so that a total of $20,000 is excluded from your home’s taxable value.

Increase Homestead Property Tax Exemption by $10,000 per Year ($1,200M)

Currently, $15,000 of a home’s value is excluded from the school property tax calculation. The proposal would exempt an additional $10,000, so that a total of $25,000 is excluded from your home’s taxable value.

Business Options

Lower the 1% Business Tax Rate to .75% ($1,000M*)

Current law provides two general business tax rates: 1% for most entities and .50% for qualifying wholesalers and retailers. The proposal would lower the 1% business tax rate to .75% thereby reducing the overall business tax payment. The new rates would then be .75% and .50%. Note: Begins FY 2015.

Allow a Business to Deduct 1099 Payments from their Business Tax ($280M)

Generally, current law doesn’t allow a service provider, such as a home security company, to deduct any payments made to subcontractors when calculating its tax liability. Subcontractors are not considered employees under the business tax for purposes of the compensation deduction. The proposal would allow for the deduction of such payments.

Make the Small Business Tax Exemption Permanent ($166M)

The proposal would remove the expiration date for the $1 million small business tax exemption. Otherwise, the exemption will apply only to companies under $600,000 after December 31, 2013.

Business Tax Credit for Research and Development Activities ($60M)

The proposal would allow businesses that engage in research and development activities to receive a credit, subject to federal limitations, against their business tax.

Sales Tax Research and Development Exemption ($300M)

The proposal would allow businesses that engage in research and development (R&D) activities an exemption from the 8.25% sales tax on R&D related purchases.

Exempt Business Inventories from the School Property Tax ($1,400M*)

Texas is one of only a few states that taxes business inventories of materials, including those of retailers, under their property tax. This proposal would exempt these inventories from the school property tax, making Texas more competitive in attracting new businesses to the state. Note: Begins FY 2015.

Communication Sales Tax Exemption ($600M)

The proposal would exempt equipment purchased by a telecommunications provider from the sales tax. Many states currently exempt sales tax on purchases of communications equipment because that increased cost is otherwise passed on to consumers in the form of higher prices for communications and Internet-related products and services.

Clear Results

Note: These numbers are estimates.
* Begins FY 2015.

Step 2: Answer a Few Questions

Are you a Texan?

     Yes        No, but I want to be.

Do you own a business?

     Yes        No

Step 3: Submit Your Suggestion