Do not forget that "capital" purchases can also subject to local property taxes (called business personal property). You can imagine a large farm that pays pro

Do not forget that "capital" purchases can also subject to local property taxes (called business personal property). You can imagine a large farm that pays property tax based on the farm size, but a manufacturer with large capital equipment on a small lot would not pay so much property tax. To make sure that all capital is taxed, you have to pay taxes on Capital purchases, at the market value of the item. If you can lease it instead, the tax burden is placed on the lessor. In Houston, that's around 3% of the value of the property.