Taxes & Utilities / Pearland Economic Development Corporation

Texas’ economic environment encourages job creation and capital investment while maintaining low taxes, predictable regulations and a fair legal system. With no corporate income tax and no personal income tax, we have one of the lowest tax burdens of any state in the country.

Texas Highlights

8.25%

Sales and Use Tax

The Sales and Use Tax is imposed on all retail sales, including rentals and leases of most goods. The State of Texas sales tax rate is 6.25%. The local sales tax rate in the City of Pearland is 2.0%, making for a total sales tax rate of 8.25%.

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State Income Tax

The State of Texas has no personal income tax. In fact, the state’s constitution restricts passage of a personal income tax.

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State Corporate Tax

Texas does not levy a state-level corporate income tax but does impose a franchise tax, which many small businesses are exempt from—making the state especially attractive for business formation.

Property Tax

Ad Valorem property taxes are placed on real property and tangible personal property. Real property includes land, building, structures and all improvements or fixtures annexed to the building or structure. Tangible personal property that is used for the production of income includes business inventories, machinery, equipment and furnishings.

Pearland Typical Tax Rates

Authority	Rate
City of Pearland	$0.623765
Brazoria County Drainage District #4	$0.138000
Brazoria County	$0.291106
Road & Bridge Fund	$0.050000
Pearland Independent School District	$1.302700
Total	$2.405571

The majority of the land area of the City of Pearland is in Brazoria County and either the Pearland or Alvin Independent School Districts. There are also smaller portions of the city that are located in either Harris and Fort Bend Counties and other taxing jurisdictions. Homestead and other exemptions will reduce the total taxes paid.

Typical Business Filings and Coverages

Unemployment Insurance (UI) tax is a tax employers pay to fund unemployment compensation for workers who lose their jobs and is required by law for all Texas employers. Employers must register with the Texas Workforce Commission and UI tax is paid quarterly.

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Texas has no corporate income tax, but it does have a franchise tax, which is based on the taxable entity’s “margin.” The Texas Comptroller’s website has published a detailed Franchise Tax Overview as well as a Franchise Tax Calculator worksheet.

Franchise Tax Overview

Franchise Tax Calculator Worksheet

In Texas, private employers can choose whether or not to carry workers’ compensation insurance.

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Utilities

Electricity

Pearland’s deregulated energy market gives businesses the power to choose from a variety of electricity providers, fostering competition that leads to customized plans and lower costs. CenterPoint Energy is the main provider in the area, with reliable transmission and distribution. With access to a diverse mix of energy sources—including natural gas, wind, solar, and nuclear—businesses can select sustainable options that align with their goals.

The competitive nature of Pearland's electricity market often results in business electricity rates that are 20-30% lower than residential rates. For enterprises, this translates into substantial cost savings, allowing for the reallocation of resources to other areas.

Natural Gas

CenterPoint Energy is the natural gas provider in Pearland with an expansive system that guarantees consistent natural gas delivery. Large industrial consumers may purchase gas by other means, including long-term contracts for the supply of natural gas. Contract rates depend on a number of factors, including proximity to a major pipeline, customer’s overall demand, current market conditions and anticipated market conditions.

Visit CenterPointEnergy.com

Water & Wastewater

Pearland sources its water from both groundwater wells and surface water purchased from the City of Houston. To further enhance supply, the city is set to inaugurate a new surface water treatment plant in May 2025, which will add an additional 10 million gallons per day (MGD) capacity, increasing the city's total water processing capability to 44 MGD. Complementing its water supply, Pearland operates five wastewater treatment plants with a collective capacity of 16.45 MGD.

Learn More at PearlandTX.gov