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A tax is a charge or levy of money made by a governmental entity (state, local, or federal) against a taxpayer—usually a U.S. citizen or a person living or working in the United States. There are many kinds of taxes, including income tax, capital-gains tax, property tax, franchise tax, gift tax, ad valorem tax, sales tax, use tax, inheritance tax, and estate tax.

In Texas, as in other states, taxpayers are subject to various forms of taxation. Texas does not impose a state income tax on individuals, making it one of the few states in the U.S. to do so. However, it does levy a franchise tax, which is a tax on the privilege of doing business in the state, applicable to certain businesses. Property taxes in Texas are locally assessed and are a significant source of revenue for local governments, funding services such as public education and infrastructure. Texas is known for its relatively high property tax rates compared to other states. The state also imposes a sales and use tax, which is applied to the sale, rental, and use of most goods and some services. While there is no inheritance tax in Texas, the state does impose a gift tax, which is aligned with federal gift tax regulations, meaning that most small gifts are exempt, but larger transfers may be taxable. Lastly, the federal government imposes additional taxes such as income tax, capital gains tax, and estate tax, which affect Texas residents as they do those in other states.

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