Income Tax
Texas has no personal or corporate income tax.

Texas Sales Tax
Of the 8.25% sales tax levied in the City of Hutto, 6.25% is the State of Texas portion.

Leased or purchased machinery, equipment, replacement parts, and accessories that have a useful life of more than six months, and that are used or consumed in the manufacturing, processing, fabricating, or repairing of tangible personal property for ultimate sale, are exempt from state and local sales and use tax.

Texas businesses are exempt from paying state sales and use tax on labor for constructing new facilities.

Texas businesses are exempt from paying state sales and use tax on the purchase of machinery exclusively used in processing, packing, or marketing agricultural products by the original producer at a location operated by the original producer.

Texas companies are exempt from paying state sales and use tax on electricity and natural gas used in manufacturing, processing, or fabricating tangible personal property. The company must complete a "predominant use study" that shows that at least 50 percent of the electricity or natural gas consumed by the business directly causes a physical change to a product.

Texas Margin Tax
In 2008, Texas replaced its corporate franchise tax with a tax based on the taxable entity’s “margin.” Changes made by the 79th and 80th Legislatures amend Texas Tax Code Chapter 171 to revise the existing franchise tax by changing the tax base, lowering the rate, and extending coverage to active businesses receiving state law liability protection.

The tax applies to corporations, limited liability companies, partnerships (general, limited and limited liability), business trusts, professional associations, business associations, joint ventures and other legal entities organized in Texas or that do business in Texas. The tax is not imposed on: sole proprietorships, general partnerships directly owned by natural persons, and other specified entities such as certain financial services businesses, nonprofits, and others.

In addition, a corporation in Texas engaged solely in the business of manufacturing, selling, or installing solar energy devices  is exempted from the franchise tax. There is no ceiling on this exemption, so it is a substantial incentive for solar manufacturers.

Based on calculation formulas and discounts, taxable entities with revenues of $434,782 or less will owe no tax. Taxable entities who calculate their tax due to be less than $1,000 will owe no tax. However, all taxable entities, including those who will owe no tax, must file a return.

Hotel Occupancy Tax (HOT)
By law of the State of Texas, the City of Hutto collects a Hotel Occupancy Tax (HOT) from hotels, motels and Bed and Breakfasts. Under state law, the revenue for the HOT may be used only to directly promote tourism and the convention and hotel industry. The current composite rate in the City of Hutto is 13%. Of that 7% is levied by the City of Hutto, and 6% is levied by the state of Texas.