Margins of Texas

It is strictly a business matter as to what a Tenant is willing to pay or unwilling to pay. In Texas, almost every Landlord seeks to pass the “Margin Tax” along to Tenants. The discussion below will explain that it is not a real estate tax and is not a tax only on rental income. It is a Franchise Tax and is payable, according to a formula, based on an entity’s (not just a landlord entity’s) gross income. A manufacturer would pay it. A law firm organized as a limited liability company or professional corporation would pay it.

The “Margin Tax” is an income tax. The enabling Texas legislation calls it a Franchise Tax. The “public” calls it [Read more…]