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Taxes

Businesses and individuals find the Texas system extremely favorable.  There is no personal income tax, state property or unitary tax.  Texas is one of only seven states without a personal income tax.

The sales and use tax accounts for over 50% of total state revenue.  Other major revenue generators include the motor fuel tax, oil and natural gas severance taxes, and the corporate franchise tax.  At the local level, revenues are generated primarily by the ad valorem property tax and local sales tax.

Property Taxes
Texas has no state property tax. For the local property tax, taxable assets include real estate and improvements, as well as tangible personal property such as production machinery and equipment. Business inventories are taxed at the same rate as other business property.

Amarillo’s “freeport” designation allows exemption from inventory property taxes of goods exported from Texas. The exemption applies to items in your inventory on January 1 that: 1) are or will be forwarded out of Texas within 175 days of the date you acquire them or bring them into Texas; 2) are in Texas for assembling, storing, manufacturing, repair, maintenance, processing or fabricating purposes; and 3) remain under your continuous ownership from the time you bring them into the state or acquire them in the state until they are forwarded out of the state.

 Per $100 Property Valuation    
 Within Amarillo City Limits:  Unincorporated Potter Co:  Unincorporated Randall Co:

 City of Amarillo            0.320090

 Potter County           0.627070

 Randall County            0.384300

 Amarillo College         0.199500

 Highland Park ISD           1.167440

 Canyon ISD           1.265000

 Amarillo ISD           1.170000

 High Plains Water District           0.007850

 So. Randall County Hospital           0.084410

 Potter County           0.627070

 

 High Plains Water District           0.007850

                                        OR

 TOTAL           1.795295

 TOTAL            1.74156

 Randall County           0.384300

 

 

 

 

 

 TOTAL (Ama/Potter)           2.31666

 

 

 TOTAL (Ama/Randall)           2.07389

 

 

Sales Tax
The state sales tax rate is 6.25%, with Amarillo assessing an additional 2%. This tax is levied on the sale, rental and use of most tangible property, labor and selected services. However, current exemptions in the sales tax statutes include:

  • Machinery and equipment used directly in the manufacturing process or for pollution control; and   
  • Items that become a component part of a manufactured item, are consumed in the manufacturing process or delivered out of state

State Income Tax
Texas has no personal income tax. The corporate franchise tax includes an income component.

Corporate Franchise Tax
Incorporated businesses chartered and authorized to do business in Texas are subject to the franchise tax. Corporations pay either $2.50 per $1,000 in taxable capital, or a 4.5% tax on earned surplus, whichever amount is greater. Taxable capital includes stated capital, surplus, deferred income taxes and non-current employee benefits allocated to Texas on a gross receipts basis. Earned surplus is federal taxable income plus officers’ and directors’ compensation allocated to Texas on a gross receipts basis.

"Our employees' pride in individual workmanship is reflected in the high quality of their work and their commitment to safety."

Ron Riley

Amarillo Plant Manager for Crouse-Hinds Division of Cooper Industries