OPPORTUNITIES IN DALLAS

TAXES &
INCENTIVES

Taxes & Incentives - Tax Rate 

Texas is renowned for its business-friendly tax structure. Texas boasts a low corporate franchise tax rate and beneficial policies to further reduce the corporate tax burden. Due to the absence of a state income tax for corporations and individuals, Texas enhances profitability and provides businesses with more capital to invest in growth and R&D.  While the tax burden is relatively low, corporations relocating to Texas should be aware of the following taxes:

0%

Corporate Income Tax

0%

Personal Income Tax

0%

Local Wage Tax

5th

Lowest per capita tax in US

Franchise Tax

Corporations, LLCs, and other entities pay a franchise tax based on their earnings, with rates varying but not exceeding 1% for most businesses and 0.5% for qualifying wholesalers and retailers. Specifically, the tax rate is 0.331% for companies with revenue between $2.47M and $20M. For companies with revenues >$20M the tax rate is 0.375% or 0.75%, depending on the type of business.

Unemployment Insurance Tax

Employers pay into the Unemployment Compensation Fund, with tax rates for new employers set at 2.7% of the first $9,000 of each employee’s wages and varying rates for established businesses.

Sales and Use Tax

A state sales tax of 6.25% applies, with local jurisdictions able to add up to 2%, making the maximum rate 8.25%. This tax affects the sale, rental, and use of tangible goods and some services.

Property Tax

While Texas does not have a state property tax, local governments assess and collect property taxes on real and personal business property, which can vary by location.

Taxes & Incentives - Property Tax in Dallas

The total property tax rate for the City of Dallas has declined annually since 2018. The current tax rate is $0.7357 per $100 in valuation, reflecting a 5.7% decrease over the past 5 years. Other jurisdictions within the City of Dallas set their own tax rates. The below rates are provided as information only; please confirm current rates with the appropriate jurisdiction. Rates are applicable to real property and business personal property. For projects located within the City of Dallas and Dallas County, the total combined local tax rate is $2.294781 per $100 in valuation.

  • Dallas County – 0.215718
  • Dallas Independent School District – 1.013835
  • Dallas College –  0.110028
  • Parkland Hospital – 0.2195
2023 2022 2021 2020 2019 2018
$0.7357
$0.7733
$0.7763
0.7766
0.7767
0.7804

Get started with our Incentive Tool
Ready to be part of Dallas’s success story? Start with the Incentives Inquiry Tool in order to identify the best-fit programs for your project. The City’s Economic Development staff are ready and waiting to assist you in this process, so please feel free to contact us with any questions.

Taxes & Incentives - Catalyzing Growth & Development

The City of Dallas intentionally utilizes State and local incentives to empower enterprise and developers, including enhancing the community as envisioned by the City Council’s Economic Development Policy and Incentive Policy. These policies represent Dallas’ commitment to foster a thriving, equitable, and sustainable business environment. The suite of incentive programs is designed to support and stimulate real estate development and businesses, including these new policy tools:

To activate real estate development and job creation in Target Areas by offering a simplified process; qualified projects can qualify for a 90%, 10-year Real Property tax abatement or a 90%, 5-year Business Personal Property tax abatement.

To provide funding for qualified projects in target areas that serve a community development purpose, including projects with non-profit developers.

To support community developers and qualified women and/or minority developers by providing loans for eligible pre-development project costs.

To assist in closing the infrastructure gap by directing funding to areas most in need (capitalized by the ongoing collection of windfall funds from existing TIF districts).

Recognizing the importance of comprehensive funding strategies, city funds in Dallas are typically the last source committed to a project. This approach allows these funds to effectively fill the gap after other funding sources have been maximized, ensuring a well-rounded financial plan for each project. The incentive approval process has been simplified to allow for administrative approval for the incentives listed below. City Council approval is required for all other incentives.

  • As-of-right Tax Abatements located in Target Areas
  • Predevelopment Loans for projects that are led by certified women and minority developers
  • Negotiated Incentives at or below $1 million for projects that are either inside Target Areas or that are led by certified women and/or minority developers 

Taxes & Incentives - Other

These robust infrastructure elements create an environment where businesses can maximize their productivity and growth potential, making Dallas/DFW a strategic choice for relocation.

Telecommunications

State-of-the-art telecommunications infrastructure, including extensive fiber optic and broadband coverage, ensures businesses are well-connected.

Energy Grid 

A reliable and independent energy grid with competitive energy costs, including renewable energy options, provides businesses with the power they need to operate efficiently.

Water Supply

Robust water infrastructure supports both current needs and future growth, a critical factor for many industries.

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