The Katy area and the great state of Texas have created dynamic and growing economies with the help of a pro-business tax structure and pro-business climate. Some key features of the tax and business environment include: no state income tax on persons or businesses, no local income or occupational taxes on persons or businesses, a low franchise tax, a strong tort reform law and Employment-At-Will and Right-to-Work laws.
The State of Texas franchise tax is a privilege tax imposed on each taxable entity formed or organized in Texas or doing business in Texas. State of Texas franchise tax rates are: 0.75% for most entities; 0.375% for qualifying wholesalers and retailers; and 0.331% for those entities with $20 million or less in annualized total revenue using the "E-Z Computation."
Ad Valorem (Property) Tax
Ad Valorem or property taxes are assessed at the local level on real and personal property for various taxing districts. Property is assessed per $100 valuation at 100% by County Appraisal Districts annually, unless otherwise noted. Numerous property tax exemptions are available for qualifying properties. Below are some property tax rates for various.
Ad Valorem (Property) Tax Rates - 2018
|Taxing District||Rate ($) - 2018|
|City of Katy||0.48672|
|City of Fulshear||0.16251|
|City of Houston||0.588310|
|Fort Bend County||0.44470|
Sales and Use Tax
Sales and use tax rates for the City of Katy, City of Fulshear and City of Houston are one percent (1%). Special purpose districts such as Metro have a rate of one percent (1%). The State sales rate is 6.25%. The maximum total sales tax for any area in Texas is 8.25%. Numerous sales tax exemptions may be available for qualifying economic development projects.
The Texas Fuels Tax is $0.20 per gallon. There is no local fuel tax.
Companies employing one or more employees may be required to pay state unemployment tax. A minimum of six quarters is required to obtain an experience rating. Starting rate in the State of Texas 2.7% and is based on the first $9,000 in earnings.
Employer Contribution Rates (Estimated 2018)
|Average UI tax rate as a percent of taxable wages, Texas||2.59%|
|Average UI tax rate as a percent of taxable wages, U.S.||2.21%|
|Average UI tax rate as a percent of total wages, Texas||0.51%|
|Average UI tax rate as a percent of total wages, U.S.||0.58%|
Source: U.S. ETA (Employee & Training Administration, 2018)
Workers Compensation Insurance
Options for Workers Compensation include self-insurance, the state operated Texas Workers Compensation Insurance Fund, or a licensed private insurance company.
Workers’ Compensation Program Costs per $100 of Covered Wages (Employer Cost)
Source: National Academy of Social Insurance, 2017