TTARA research release: The Highs and Lows of Texas Taxes

For Immediate Release                                                              Contact: Kirsten Voinis

JUNE 8, 2020                                                                               (512) 922-7141,


TTARA research release: The Highs and Lows of Texas Taxes

Is Texas a low tax state or a high tax state? That depends on whether you’re an individual or a business. The Texas Taxpayers and Research Association (TTARA) looks at the tax burdens for each in a new research brief, The Highs and Lows of Texas Taxes.

The report is the latest in a series of studies TTARA has done over the years assessing state and local tax burdens on individuals and businesses across the 50 states. Though specific rankings have changed over the years, the basic story has not: Texas is a low tax state for individuals and a high tax state for most businesses.

“This research brief clearly dispels the common misconception that Texas is a low tax state for businesses, in general,” said TTARA President Dale Craymer. “A look at the various taxes paid by individuals and businesses shows that while Texas’ tax system is friendly for the individual Texan, the state is at a disadvantage when competing for businesses, particularly capital intensive ones like manufacturers.”

Among the findings in the research brief:

  • Because Texans do not pay an individual state income tax, unlike the residents of 43 other states, their state and local taxes relative to the money they earn rank Texas third lowest – 40% below the average across the states.
  • By relying heavily on property and sales taxes, the average state and local tax burden on businesses in Texas relative to their economic output scores 11th highest, or 19% above the average of the states.
  • Businesses pay almost two-thirds (62.3%) of the taxes collected by Texas state and local governments, versus 43.5% in the average state.
  • Individual Texans pay 37.7% of all state and local taxes collected, well below the national average of 56.5%.
  • The sales tax is typically thought of as a consumer tax, yet businesses pay 43 cents of every dollar the state collects.

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The Texas Taxpayers and Research Association (TTARA) is a non-profit, non-partisan membership-supported organization of businesses and individuals interested in state and local fiscal policies in Texas and the way those policies impact our economy. TTARA members operate in every part of Texas; they employ and provide incomes to thousands of Texans; they produce or provide every type of good or service Texans consume; and, they provide a major portion of the revenue that supports public services at every level of government. TTARA has been recognized as the state’s leading organization specializing in tax and fiscal policy for more than 50 years. The organization’s annual meeting, held in the fall each year, features top elected leaders and government officials discussing current tax, expenditure, and other public policy issues.

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