Texas income tax

Texas is one of a handful of states that does not impose a personal state income tax. That means most Texas residents don’t pay Texas state income tax and don’t need to file a Texas state income tax return. However, Texans are still subject to other state and local taxes, which we will explain below.

What is state tax?

State tax is a tax imposed by a state government to fund public services and operations. Depending on the state, taxes may apply to income, property, sales, businesses, and other activities.

How state tax laws differ from federal laws

Texas’s tax regulations are just as important for individuals and businesses as federal laws.

Unlike the federal tax system, state taxes vary from state to state. So, certain tax laws in some states may not apply to others. It’s important to understand your state’s specific tax rules. This makes a difference in the responsibilities for you, the taxpayer. While you may not be subject to Texas income taxes, you will need to adhere to other state tax laws in Texas.

Does Texas have state income tax?

No, Texas is one of the few states that does not impose an individual income tax. As a result, most residents do not pay Texas state income tax on wages, salaries, retirement income, or other personal earnings. While individuals generally do not pay Texas income tax, Texas does collect revenue through other taxes, including taxes on sales, property, and certain business activities.

Do you need to file a tax return in Texas?

Most individuals do not need to file a Texas state income tax return because Texas does not levy a personal income tax. However, you may still need to file a federal income tax return with the IRS if you meet federal filing requirements.

In addition, certain businesses may have separate Texas tax filing obligations depending on the type of tax involved.

When is the last day to file taxes in Texas?

Texas residents do not have a state income tax filing obligation because Texas does not tax individual income. However, if you have business tax obligations in Texas, you must file by the first day of the fifth month following your fiscal year-end (May 1 for standard calendar-year filer).

What taxes do Texas residents pay instead?

Although Texans generally do not pay Texas state income tax, they may still pay other state and local taxes.

Here are some common taxes paid by Texas residents:

• Sales tax on purchases
• Property tax on real estate
• Business-related taxes
• Motor vehicle-related taxes and fees
• Fuel taxes
• Hotel occupancy taxes
• Tobacco taxes

Deducting State Taxes on Your Federal Return

If you pay some types of state or local taxes to Texas or a locality, the IRS might allow you to claim a deduction on your federal tax return for them.

Get help with your taxes from H&R Block

Whether you have questions about Texas state taxes or business tax obligations, H&R Block can help. Whether you choose to file with a tax pro or file with H&R Block Online, you can rest assured that we’ll get your max refund.