Texas features one of the largest collections of Qualified Opportunity Zones in the country. There have been 628 census tracts in Texas approved as opportunity zones by the state governor and CEO of U.S. Territories. The sheer size of Texas has meant that all those census tracts will be spread throughout the state. Here is a look at the counties that feature the most opportunity zones.
This leads the way by a longshot with 110 opportunity zones.
This county is home to two dozen opportunity zones.
There are 23 opportunity zones located throughout this county.
There are 21 qualified opportunity zones throughout this region.
One of the more popular counties is home to 18 approved census tracts.
The creation of Opportunity Zones was designed to improve low-income areas through the use of capital gains tax incentives. These zones were identified as economically-distressed areas in need of an upgrade. Enticing investors with these tax incentives has the potential to improve those areas and decrease poverty rates. To qualify as an opportunity zone, a census tract must meet certain income requirements. The program does not recognize every area that is eligible, but has designated a variety of locations in Texas as opportunity zones.
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Texas Tax Situation
There is no state income tax in Texas, although there is still a need to collect funds and that is done in a few different ways. Sales tax is higher in Texas than it is in many other states. The state taxes 6.25 percent on purchases and local municipalities also add on their own rates. The average local tax rate is 2 percent, which boosts the state average up to 8.25 percent.
Texas also has high taxes on its property. While the cost of homes may not be as expensive as it is in other states, the property taxes are among the highest in the country. Texas currently has the sixth-highest property taxes of any state. The annual property tax paid on a median-value home in Texas is $2,654.
Texas is also friendly to the wealthy as it is one of the better states for taxes to those that fall into this category. The top 1 percent of annual income in Texas stands at $1.3 million. The tax situation is also friendly to businesses as there is no corporate income tax in Texas.
TX Industries with Tax Breaks
Texas has gained notoriety for all its tax breaks given out to companies over the course of the year. While that number is up around $20 billion each year, the state stands by the notion that it leads to more jobs and economic progress. Here is a look at just some of the industries that continue to benefit from tax breaks in Texas.
Oil and Gas
Texas is known for this industry and offers sizable tax breaks to this sector.
The state has enacted a tax exemption solely for this industry.
Both farmers and ranchers have a number of tax incentive programs.
Companies producing products can incur major tax breaks each year.
The tax breaks offered by Texas have made it very enticing for companies to set up locations in the lone star state. The state has a reputation for being rather liberal when doling out tax credits, although maintaining big business is a way of strengthening the economy in a state that does not have a personal income tax.
Texas State Financial Facts
The cost of living differs in Texas because it encompasses such a large space. However, residents all take advantage of no personal income tax, but even rent is increased as a result of high property taxes. Median household income – $56,565
- Median household savings
- $0 in savings: 43%
- $1,000 or less in savings: 56%
- Total household investments
61 percent of families that own their home
Median value of Texas home – $190,400
3.1 percent growth of pay rate in Texas
- Median household savings
Current economic condition of Texas
Texas’ economy would rank tenth in the world if it were a country and not a state. That is not just attributed to its size, but also its growing economy. The steady flow of people is almost double the rate of California in terms of percentage. That has helped develop one of the top economies of any state in the country.
Texas features the fifth most productive economy of all states and its GDP growth rate is a whopping 5 percent. The state has historically thrived because of the oil industry, although the cities of Dallas, Houston and Austin are all growing into busy business hubs. Corporate relocations are becoming quite common, particularly in those three cities.
The unemployment rate in Texas is averaging right around 4 percent, with lower showing in some months. These numbers have continued to improve as fewer and fewer Texans are having difficulty finding work. Since the financial crisis of 2009, Texas has continued an upward surge. That is based a lot on the booming business sector, as the ability to create tax incentives for corporations has made Texas popular among businesses that are moving across state lines.
This process helped Texas recover from the 2009 recession, caused by the latest financial crisis. Many other states were hit much harder by the financial crisis, although job growth was heavily impacted. It took Texas a few years to dig itself out of that hole, but the results since 2013 have been very good economically. Texas now ranks No.1 in the country among growth prospects.
Primary Industries in Texas
Texas is known for its oil industry, although it has come to rely on other industries for its continual and rapid economic growth. There has been upward movement in all types of industries in Texas and here is a look at some of the primary ones in the lone star state:
- Oil and Gas
- Financial Services
- Information Technology
Opportunity Zones in Texas
Texas is home to 21 Fortune 500 companies, including the No.2-ranked Exxon. However, the economy is not solely dependent upon the oil industry any longer. Dallas has become a beacon for the business world as it is home to nine Fortune 500 companies. The long-standing tradition of Texas being driven by the oil industry has changed as there is a wealth of commerce up and down the state Here is a look at the top-performing economic cities in Texas:
- San Antonio
- Fort Worth
For all the growth Texas has experienced, there are still areas in need of improvement. The size of Texas is a reminder that there are going to be communities suffering an economic strain. There are a lot of smaller cities in Texas experiencing high poverty rates. The city of Roma is the fifth poorest city in Texas with a population of approximately 10,000 people. The poverty rate in this city is 50.7 percent, evidencing the desperation of the situation for those residents. The small town of Hempstead has an unemployment rate just under 20 percent, while the median income is $30,661 annually. These are the kind of communities that would be best served with the implementation of the Opportunity Zone program.