Pub. 60 2019-2020 Issue 3

31 SPRING 2020 3 AND USE TAXES 3,916,225 D RENTAL TAXES 0,592,018 OR FUEL TAXES 3,004,327 FRANCHISE TAX 17,868,701 RODUCTION TAX 86,823,879 RODUCTION TAX 85,680,675 URANCE TAXES 99,024,669 OBACCO TAXES 10,390,955 VERAGES TAXES 69,402,271 CCUPANCY TAX 36,110,128 UTILITY TAXES 71,361,566 OTHER TAXES 26,546,683 d fees, of ce ; ons; and as Comptroller of 0 due to rounding. STAT E TAX COL L E C T IONS AND PE RSONAL INCOME FISCAL 2010 -2019 Cumulative Growth Rates State tax collections saw slightly higher cumulative growth rates than Texas personal income from fiscal 2010 through 2014 then saw a decline in 2016 due to franchise tax cuts and a slowdown in the oil and gas industries. Tax collections saw a rebound in 2018 mostly due to increased remittances from taxpayers in the oil and gas industries, followed by moderate growth in 2019 as taxable spending in these industries pleateaued. Sources: Texas Comptroller of Public Accounts; U.S. Bureau of Economic Analysis 2018 2019 2017 2016 2015 2014 2013 2012 2011 2010 57% 57.4% Tax Collections (All Funds, Excluding Trust) Personal Income -10 0 10 20 30 40 50 Where Does Texas’ Tax Revenue Come From? While Texas is a relatively low tax state, it does rely on revenue generated by more than 30 different taxes to fund the functions of state government. Nearly all of this revenue is generated by the following major taxes: • Texas imposes a 6.25 percent sales and use tax on sales, leases and rentals of goods, as well as taxable services such as telecommunications and amusement services. • Motor vehicle sales within Texas are also taxed at 6.25 percent of the sales price, minus any trade-in allowance. Motor vehicle rentals are taxed at 6.25 or 10 percent of gross receipts, depending on the length of the rental contract. • Texas’ motor fuel tax rates can vary depending on the type of fuel; the two most common, gasoline and diesel, are both taxed at 20 cents per gallon. • The state’s franchise tax is imposed on certain kinds of businesses operating in Texas such as corporations, banks, LLCs and partnerships. Of the millions of businesses across the state, only around 130,000 filers usually owe any tax. • Texas’ severance taxes are imposed on entities that extract nonrenewable natural resources such as oil or natural gas. Revenues from these taxes are highly variable and are levied at rates of 4.6 percent of market value for oil and condensate, and 7.5 percent of market value for natural gas. • The state’s insurance taxes include a number of premium taxes levied at rates ranging from 0.5 percent to 4.85 percent of gross premiums, and various maintenance taxes. • Texas’ “sin” taxes are levied on tobacco and alcoholic beverage products, the largest of which are the cigarette tax – levied at $1.41 per pack of 20 – and the mixed beverage taxes, which are imposed on consumers at 8.25 percent of the sales price and on business permit holders at 6.7 percent of gross receipts.  TAXES — CONTINUED ON PAGE 32