Texas has no state income tax, but sales tax varies by location from 8.25% to 8.875%
Texas does not charge state income tax. Instead, the state funds itself partly through sales tax. The state sales tax rate is 6.25%, but most Texans pay more than that because cities and counties add their own local taxes on top. Your total rate depends on where you live and where you make the purchase.
The lowest combined rate in Texas is 8.25% — this happens in a few counties where only the state and county tax apply, with no city tax added. The highest combined rate is 8.875%, found in some cities that layer all three taxes together. Most people in Texas cities pay between 8.25% and 8.875%.
Sales tax applies to most goods you buy in stores, online purchases shipped to Texas, and some services. It does not apply to groceries, prescription medications, or certain medical equipment. The tax is calculated on the sale price before any discounts are applied.
Key Takeaways
- Texas state sales tax is 6.25%, but your actual rate includes county and city taxes, making the total between 8.25% and 8.875% depending on location.
- The rate you pay is determined by where the purchase happens, not where you live — buying something in a different city means a different tax rate.
- Groceries and prescription medications are not taxed in Texas, but most other goods and many services are.
- Online purchases are taxed at the rate of the Texas address where the item ships, not where the seller is located.
How the three layers of Texas sales tax work
Texas sales tax has three parts stacked on top of each other. The state portion is 6.25%. On top of that, your county adds a tax — this ranges from 0% to 2%, depending on which county you are in. Then your city or other local taxing district adds another layer, usually between 0% and 2%.
When you buy something, the store charges you the combined rate for that location. You do not pay each tax separately — the register shows one total. But behind the scenes, the money goes to three different places: the state, the county, and the city or district.
Some counties have no additional county tax, which is why those areas have lower combined rates. Some cities have no local tax either. But most populated areas in Texas have all three layers, which is why 8.25% to 8.875% is the normal range for most shoppers.
Sales tax rates in major Texas cities
| City | Combined Sales Tax Rate |
|---|---|
| Houston | 8.25% |
| Dallas | 8.25% |
| San Antonio | 8.125% |
| Austin | 8.25% |
| Fort Worth | 8.25% |
| El Paso | 8.625% |
| San Angelo | 8.25% |
These rates are current but can change if a city or county votes to adjust its local tax. The state rate of 6.25% does not change often, but local rates shift more frequently. If you live near a city border, the rate can differ by 0.5% or more depending on which side of the line you shop.
Some smaller towns and rural areas have lower rates because they have no city tax layer. If you are shopping in an unincorporated area of a county, you pay only the state rate plus the county rate, which can be as low as 6.25% total in rare cases.
What is and is not taxed in Texas
Taxed items: Clothing, electronics, furniture, household goods, gasoline, restaurant meals, hotel stays, and most services including haircuts and car repairs. Prepared food and drinks are taxed, but raw groceries are not.
Not taxed: Unprepared groceries (bread, milk, vegetables, meat from the butcher counter), prescription medications, insulin and diabetic supplies, and certain medical devices prescribed by a doctor. Items bought with food stamps (SNAP benefits) are not taxed at the register because the tax is built into the program's accounting.
The line between taxed and untaxed can be confusing. A rotisserie chicken from the grocery store deli is taxed because it is prepared food. A raw chicken from the meat counter is not. A candy bar is taxed. A loaf of bread is not. When in doubt, the cashier can tell you whether an item is taxed before you buy it.
How sales tax works for online and out-of-state purchases
If you order something online and have it shipped to a Texas address, you pay Texas sales tax at the rate for that delivery address. The seller collects the tax and sends it to Texas, even if the company is based in another state. This applies to nearly all online retailers now, including Amazon, Walmart, and smaller sellers.
If you buy something in another state and bring it back to Texas, you do not pay Texas sales tax at the time of purchase. However, Texas law technically requires you to pay "use tax" on items you bring into the state — this is the same rate as sales tax but is rarely enforced for individual purchases. Businesses are expected to track and pay use tax on items they buy out of state for business use.
If you order from a company that does not collect sales tax, you are not required to track it yourself as an individual. The responsibility to collect tax falls on the seller, not the buyer.
Sales tax on services in Texas
Most services in Texas are taxed, but not all. Haircuts, car repairs, plumbing, electrical work, and pest control are taxed. Professional services like accounting, legal advice, and medical care are generally not taxed. The rule is roughly: if it is a trade or repair service, it is taxed. If it is professional advice or medical treatment, it usually is not.
Some services fall into gray areas. A gym membership is not taxed. Personal training sessions at that gym are taxed. Dry cleaning is taxed. Laundry services are not. If you are unsure whether a service is taxed, ask the business before you pay — they know their own tax obligations.
Labor and materials are often taxed differently. If you hire someone to install a roof, the labor might not be taxed but the materials are. Ask the contractor how they are breaking down the bill so you know what to expect.
Frequently Asked Questions
What is the sales tax rate where I live?
You can find your exact rate by entering your address on the Texas Comptroller of Public Accounts website (comptroller.texas.gov). You can also call your city or county tax assessor's office. The rate depends on your specific address because even neighboring cities can have different rates.
Do I pay sales tax on groceries in Texas?
No. Unprepared groceries — bread, milk, vegetables, meat, eggs, and other raw food items — are not taxed in Texas. Prepared foods like rotisserie chicken, deli sandwiches, and restaurant meals are taxed at the full rate. Items bought with SNAP benefits are never taxed at the register.
Why is my receipt showing a different tax rate than I expected?
The tax rate is based on where the purchase happens, not where you live. If you shopped in a different city or county than usual, the rate changes. Also, some items are taxed and some are not — your receipt should show which items were taxed and which were not.
Do I have to pay sales tax on online purchases from out-of-state companies?
Yes. Nearly all online retailers now collect and send Texas sales tax on orders shipped to Texas addresses. The rate is based on your delivery address. If a company does not collect tax, the responsibility to report it does not fall on you as an individual buyer.
Is there a sales tax holiday in Texas?
Yes. Texas holds a back-to-school sales tax holiday in early August, when clothing, shoes, and school supplies under certain price limits are not taxed. The exact dates and item limits change each year. The state also occasionally holds other short-term tax holidays for specific items like energy-efficient appliances.