Bottom Line
Middle-Class Families: Mixed Tax Picture (Go to the Kiplinger Tax Map for Middle-Class Families)
Retirees: Least Tax-Friendly (Go to the Kiplinger Tax Map for Retirees)
How does a state with no income tax at all not end up on the "most tax-friendly" list? It starts by having the seventh-highest median property tax rate in the country.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Sales taxes in Texas are also high. The average combined state and local tax rate in the state is 8.2%, which is one of the steeper combined rates in the U.S.
As befits a place that pumps a lot of oil out of the ground, at least fuel taxes are low.
Texas Income Taxes
Texas has no income tax.
Texas Sales Tax
6.25% state levy. Localities can add up to 2%, with an average combined rate of 8.2%, according to the Tax Foundation.
- Groceries: Exempt
- Clothing: Taxable
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
Texas Real Property Taxes
In Texas, the median property tax rate is $1,599 per $100,000 of assessed home value.
Texas Property Tax Breaks for Retirees
Homeowners age 65 or older may be eligible for a special homestead exemption for their principal residence. For qualified homeowners, $10,000 of the property's assessed value is exempt from school taxes (this is in addition to the regular homestead exemption). Other taxing units may also offer an exemption of at least $3,000 to qualified homeowners.
School-district taxes are also frozen at the level imposed on a residence the year the owner turned 65. (Note: Starting in 2023, seniors with frozen school district taxes will be able to take advantage of property tax rate reductions passed in 2019.) Counties, cities, towns and junior-college districts can also establish a tax freeze.
In addition, a homeowner who is 65 or older may qualify to defer their property taxes until after he or she no longer owns or occupies the home as a residence. Property taxes (and interest) continue to accrue during the deferral period. Once the deferral ends, the taxes and interest must be paid.
Texas Motor Fuel Taxes
Gasoline: 20¢ per gallon.
Diesel: 20¢ per gallon.
Texas Sin Taxes
Cigarettes: $1.41 per pack
Snuff and chewing tobacco: $1.22 per ounce
Cigars: $0.01 to $0.15 per cigar, depending on weight
Beer: $0.20 per gallon
Wine: $0.20 per gallon ($0.52 if sparkling)
Liquor: $2.40 per gallon
Texas Estate and Inheritance Taxes
No estate or inheritance tax.
-
-
Lawmakers Propose Tax Hikes to Combat Climate Change
Climate change is prompting some lawmakers to propose property tax hikes to fund mitigation efforts while scientists say that global warming could reach a critical level in less than a decade.
-
I Wish I May, I Wish I Might: Estate Planning’s Gentle Nudge
Contrary to what you might expect, using precatory language such as ‘I wish’ or ‘I hope’ can play an important part in three estate planning objectives.
-
Lawmakers Propose Tax Hikes to Combat Climate Change
Climate change is prompting some lawmakers to propose property tax hikes to fund mitigation efforts while scientists say that global warming could reach a critical level in less than a decade.
-
Etsy, eBay, PayPal Want IRS 1099-K Relief for Online Sellers
Companies like ebay, Etsy, and PayPal want Congress to raise the new $600 reporting threshold for IRS Form1099-K to give relief to millions of sellers who use their sites.
-
RMD Deadline Coming Soon for Some Seniors
The IRS is reminding some seniors and retirees of an important required minimum distribution (RMD) deadline that is just a couple of weeks away.
-
Pink Tax: What Does Price Discrimination Cost Women?
Women's History month is a good time to revisit the “pink tax”—a form of price discrimination that’s banned in many states but costs women millions of dollars each year.
-
Biden Wants a Wealth Tax: Should Billionaires Pay More?
Debate over how much tax billionaires and millionaires should pay is heating up given the wealth in the Biden budget.
-
Tax Day 2023: When Is the Last Day to File Your Taxes?
tax deadline Tax Day for most of us is April 18. This is when Federal income tax returns are due. But some people have some extra time to file. Are you one of them?
-
Income Tax Brackets for 2023 Are Set
Although the federal tax rates didn't change, the tax bracket income ranges for the 2023 tax year are adjusted to account for inflation.
-
Tax Withholding Adjustments Can Boost Your Paycheck Now and Avoid Penalties Later
W-4 form If you've had too much or too little tax withheld from your paychecks, there's still time to submit a new Form W-4 to change your tax withholding for the rest of the year.
