As we welcome 2024, taxpayers in the Lone Star State are gearing up for significant changes in the Texas tax laws. From property taxes to sales taxes and everything in between, these new regulations promise to reshape the fiscal landscape for businesses and individuals alike. This article will delve into some of the changes to Texas tax laws for 2024 and discuss their potential implications.
Property Tax Reform
Property taxes have long been a hot topic in Texas, and 2024 brings some notable changes to this area. The Texas Legislature passed Senate Bill 2 in 2019, which aimed to limit property tax increases for local governments. In 2024, the full effects of this bill will be realized as it becomes more difficult for local authorities to raise property taxes without voter approval. Homeowners and businesses can expect some relief in their property tax bills as a result.
Additionally, the homestead exemption for homeowners aged 65 or older has been increased, providing additional property tax relief for senior citizens in the state.
Sales Tax Expansion
One of the most significant changes to Texas tax laws in 2024 is expanding the state’s sales tax base. This expansion includes services such as interior design, landscaping, and accounting services, which were previously exempt from sales tax. The move is expected to generate additional revenue for the state and bring Texas more in line with the taxation of services seen in many other states.
Businesses providing these newly taxable services will need to adjust their pricing and accounting systems to account for the sales tax. Consumers may also notice a slight increase in costs for these services.
New Franchise Tax Rates
The Texas franchise tax, which applies to most businesses operating in the state, will see changes to its rates in 2024. Small businesses with total revenues of less than $20 million will benefit from a reduction in their franchise tax rate. This adjustment is designed to support and stimulate small business growth in Texas.
On the other hand, large corporations with revenues exceeding $20 million will see a slight increase in their franchise tax rate. This change aims to balance the tax burden between smaller and larger businesses and generate additional revenue for the state.
Texas Gasoline Tax
Motorists in Texas will experience an increase in the state gasoline tax in 2024. The tax, which has remained unchanged for several years, will see a modest increase to fund infrastructure projects across the state. While this may lead to slightly higher fuel prices at the pump, it is expected to improve roads and transportation infrastructure, benefiting all Texans in the long run.
Digital Goods and Services Tax
As digital goods and services continue to grow in popularity, Texas is adapting its tax laws to include them in the tax base. Starting in 2024, digital goods, such as e-books, streaming services, and software downloads, will be subject to sales tax. This change reflects the evolving nature of the economy, where many transactions now occur online.
Texas taxpayers should prepare for these state tax law changes in 2024. Property owners may find some relief in property tax bills. At the same time, businesses and consumers will need to adapt to the expanded sales tax base and other modifications in tax rates. As with any tax changes, it’s essential to consult a tax professional to understand how these new laws will impact your financial situation. Keeping current with these changes is vital to ensuring compliance and making informed financial decisions in the Lone Star State.