Texas has been referenced as the most popular state for retirees, so it is no wonder there are many great Texas retirement communities. Low costs, plenty of space, warm weather, exciting cities, lively college towns, charming small towns, and hundreds of interesting active adult communities are just some of the reasons why. It is easy to get used to Texas' friendly people and a slower pace of life.
Having no income tax and a state sales tax of 6.25 percent is another big plus. In 2011, the Tax Foundation ranked Texas as having the fifth lowest total tax burden of the 50 states. The Texas Legislature also lowered certain property tax rates.
Texas also ranks thirteenth nationally in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: New Mexico (33rd), Oklahoma (30th), Arkansas (39th) and Louisiana (36th).
Sales Taxes: State Sales Tax is 6.25 percent (food, prescription and non-prescription drugs exempt); local option taxes can raise the rate to a maximum of 8.25 percent.
Gasoline Tax: $0.20/gallon
Diesel Fuel Tax: $0.20/gallon
Personal Income Taxes: No state personal income tax
Retirement Income: Not taxed.
Property Taxes: Property tax is imposed by local taxing entities. Homestead exemptions and exemptions for homeowners 65 years old or older may be granted. Counties, cities, towns and junior college districts are permitted to establish a tax freeze on homesteads of those 65 years old or older or disabled. For more information on exemptions, visit the Office of the Comptroller at www.cpa.state.tx.us/taxinfo/proptax/exmptns.html.
Inheritance and Estate Taxes: There is no inheritance tax, and the estate tax is limited and related to federal estate tax collection.
Tax Exemption for Veterans: Disabled veterans who meet certain requirements, their surviving spouses and the spouses and minor children of a person who dies on active duty in the U.S. Armed Forces are eligible for property tax exemptions on the appraised value of their property. The exemption is mandatory and applies to taxes levied by all taxing authorities in the state. For more information regarding this specific tax exemption, visit the Texas Veterans Commission at www.tvc.state.tx.us/StateBenefits.html.
For more information on taxes, contact the Office of the Comptroller at www.window.state.tx.us/taxes/.