Taxes

In Texas and the Austin region, the tax structure is fair, competitive, and designed to make companies feel welcome. Texas is one of only a handful of states with no individual income tax. Additionally, there is no corporate income tax.

Property Tax

The City of Jarrell property tax rates are very competitive, making Jarrell a very attractive location for property ownership.

Comparison of 2016 Tax Property Rates for Selected Cities and their School Districts (Williamson County)

City County City School Community College Total
Jarrell 0.476529 0.419580 1.367500 0.000000 2.263609
Cedar Park 0.476529 0.470000 1.511870 0.000000 2.458399
Georgetown 0.476529 0.424000 1.409000 0.000000 2.309529
Hutto 0.476529 0.520443 1.665500 0.045652 2.708124
Leander 0.476529 0.599000 1.511870 0.000000 2.587399
Liberty Hill 0.476529 0.500000 1.540000 0.000000 2.516529
 Round Rock 0.476529 0.425000 1.332500 0.102000 2.336029
Taylor 0.476529 0.803893 1.570000 0.000000 2.850422

Sales and Use Tax

The state levies a sales and use tax of 6.25% on sales of tangible personal property and certain services. Cities, counties, and transit authorities may add to the sales tax rate up to a maximum combined state and local rate of 8.25%.

Texas grants sales and use tax exemptions on machinery and equipment utilized in the manufacturing process. Purchases of machinery and equipment, replacement parts, and accessories that have a useful life of more than six months, and that are used or consumed in the manufacturing, processing, fabricating, or repairing of tangible personal property for ultimate sale, are exempt from state and local sales and use tax.

Natural gas and electricity are exempt from sales taxes when sold to commercial businesses that are "predominantly" manufacturing.

Groceries and over-the-counter drugs and medicines, as well as prescription drugs, are exempt from sales tax.

Corporate Franchise Tax - Entities Subject to Tax

The tax applies to corporations, limited liability companies, partnerships (general, limited and limited liability), business trusts, professional associations, business associations, joint ventures and other legal entities organized in Texas or that do business in Texas. The tax is not imposed on: sole proprietorships, general partnerships directly owned by natural persons, and other speciÿed entities such as certain ÿnancial services businesses, nonproÿts, and others.

In addition, a corporation in Texas engaged solely in the business of manufacturing, selling, or installing solar energy devices is exempted from the franchise tax. There is no ceiling on this exemption, so it is a substantial incentive for solar manufacturers.

Based on calculation formulas and discounts, taxable entities with revenues of $434,782 or less will owe no tax. Taxable entities who calculate their tax due to be less than $1,000 will owe no tax. However, all taxable entities, including those who will owe no tax, must ÿle a return.

Corporate Franchise Tax Rate

The tax rate is 1% of margin for most taxable entities. The tax rate is 0.5% for entities primarily engaged in retail and wholesale trades (as deÿned in Divisions F and G of the 1987 Standard Industrial Classiÿcation Manual) as well as those businesses under classiÿed as eating and drinking establishments.

Discounts from tax liability are available to small business. The discount rates, based on total revenue, are:

  • If total revenue is greater than $300,000 and less than $400,000, the discount is 80% of tax due
  • If total revenue is greater than or equal to $400,000 and less than $500,000, the discount is 60% of tax due
  • If total revenue is greater than or equal to $500,000 and less than $700,000, the discount is 40% of tax due
  • If total revenue is greater than or equal to $700,000 and less than $900,000, the discount is 20% of tax due