Her company has to pay sales tax when they buy their inventory for resale(they import from the mfg and wholesale to regional distributors nationwide) that they did not have before moving to Texas.
Sales tax was the subject of the thread, but I will note that my property tax on a comparable size house, lot and features is 8 times higher here although the purchase prices are about 35%-40% lower for equivelent properties.
We love living in Texas, but the taxes are our main complaint. The people here are just great.
A few comments from a (relatively) long-time Texas resident:
“but I can’t imagine paying 6.25% tax on a new car and still paying for the tag for it”
If you itemize, you can deduct, so more like the mid-4s for the effective sales tax rate. Try comparing that to California, NY, or even the majority of states. Our deduction for sales tax may go away, but it hasn’t yet.
“If you bring a car into Texas with you when you move here, there is a $90 fee added to the first tag no matter what year the car is. In my case I had three $62 tags that had $90 each added.”
I agree, that’s a bit of a sticker shock. When I moved to California years ago, it was $200 per car (in then dollars, maybe $400 now). Then you deal with registration that is 1 to 2 percent of the vehicle’s retail blue book (same for WA State and Virginia). Texas could be lower, but at $62 per year (regardless of vehicle value), it’s a good deal. Now your case with the older cars, not nearly as much benefit. But you probably come out ahead in TX, versus the 1 to 2 percent states, just due to your wife’s car.
“Also, all sales tax is a federal income tax deduction if you keep the records and itemize.”
Technically, yes - but if you live in an income tax state, the income tax is usually more than the sales tax, and you can only deduct one or the other. As far as keeping records, if you look carefully at the federal form, you have two options. First option is what you say, which is keep records of everything (which I did my first year, which was a mess and a mistake). The second option is to use the IRS standard deduction...around $2000, I think, and then add on certain big-ticket items that they identify for inclusion (mainly boats and cars). So it works out nicely.
Sales tax on a business...sorry, but that’s where our state gets most of its money - no help from me on that.
Property tax - yep, high also. The nice thing about Texas is that there are workaround options with the property tax, if you don’t like the rate. One option is to live in a condo or a very cheap house - and then you pay next to nothing in property tax. Another option is to have a lot of unfinished volume on your property (porches, garages, attics). They tax unfinished property at about one fifth the rate of climate-controlled property, so you can really do well there - if you’re into that stuff (like I am). With an income tax, you’re stuck - very few ways around it if you have a decent income (i.e., 5%’r).