Tax friendly Texas could see even more growth in 2021
SHREVEPORT, La. — Corporate reallocations to tax friendly Texas are on the rise and some are predicting 2021 could be the Lone Star State’s biggest year yet for businesses and individuals trying to get away from the tax man.
“We’re seeing a lot of corporate headquarters being moved to cities like Austin, because the old locations that they were at, such as California are just so heavily taxed that it just doesn’t make fiscal sense to stay anymore,” said Brandon Horton, CPA at Matthews, Beaty & Company in Shreveport.
“Texas is preferred because we don’t have a state income tax nor do we have a corporate income tax. In addition Texas does not have regulations that other states have, it’s very business friendly,” said Bill Dendy, CPA and money manager with Elite Financial Management in Dallas.
According to “YTEXAS,” a business network that works to develop the state’s economy and attract business, nearly 200 companies have relocated their headquarters to Texas within the past decade including 74 between 2018 and before the pandemic hit in 2020.
Among them are names like Charles Schwab, AT&T, McKesson and PGA of America.
“As a general rule when you’re looking at places like New York and California it can be a lot more attractive to businesses,” said Horton.
And, to the people who own, operate and work in those businesses.
“I was working with an executive who moved from California to Dallas and he couldn’t believe his overall savings. In California he was paying approximately 10% state income tax and it totally went away. On $200,000 of income that saved him $20,000 that year,” said Dendy.
Some financial advisors believe that if President-Elect Joe Biden enacts his tax policies, stories like that will become even more common. His tax hikes would increase the top income tax bracket from 37% to 39.6%. Many experts are predicting Biden’s plan could result in a marginal tax rate of more than 60% in New Jersey, California and Hawaii as well as New York City and a handful of other cities.
In Panola County, Carthage City Manager Steve Williams said they are more than ready for any growth that might come their way.
“Our location lends itself to being able to run your business here. You have numerous highways that can get you anywhere you want to go, I-20 being fairly close. Here, specifically in Carthage, we have Highway 59 that runs through here north and south and then you have Highway 79 that kind of runs east and west, going all the way through Austin up through here,” said Williams.
Williams also has some advice for anyone who might be trying to escape a highly taxed and regulated area.
“The only thing political I will say on this is if you’re leaving a place because of high taxes and the way things are, don’t come here and try to make it like it is where you were. We like what we have here and it’s a great place to live because of that, so come here and be part of it,” said Williams.
Another reason some say Texas has seen major corporations move in is land mass. There’s plenty of room to build and grow for companies large and small all across the state.