Texas bars municipal income or gross-receipts business taxes, so Plano funds itself through property tax, sales tax, hotel tax, and franchise fees, leaving businesses with state franchise tax obligations and minimal city-specific tax classification.
Texas Constitution Article 8 and the Tax Code prohibit municipal income taxes, and state preemption blocks gross-receipts business taxes. Plano therefore funds operations primarily through ad valorem property tax under Tax Code Chapter 26, the local 2 percent sales tax piggybacking on the state 6.25 percent, hotel occupancy tax, and utility franchise fees. Businesses owe the state franchise tax under Tax Code Chapter 171 if revenue exceeds the no-tax-due threshold, currently around 2.47 million dollars. The city does not classify businesses for taxation purposes, only for zoning and licensing under Chapter 8.
Filing fraudulent state franchise reports or evading Plano sales tax collection triggers Texas Comptroller audits, penalties, interest, and possible criminal tax fraud charges under Texas and federal law.
Plano, TX
Plano levies a 7 percent municipal hotel occupancy tax on lodging stays under 30 days, stacked on the 6 percent Texas state HOT for a combined roughly 13 per...
Plano, TX
Texas Local Government Code 229.001 preempts Plano from setting a local minimum wage, leaving the federal floor of 7.25 dollars per hour as the legal minimum...
See how other cities in Collin County handle business tax classification.
See how Plano's business tax classification rules stack up against other locations.
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