Texas sales tax is a tax on purchases of goods and some services, collected by the seller at the point of sale

Texas has a state sales tax rate of 6.25 percent. Most Texas counties and cities add their own local sales tax on top of that, so your total rate depends on where you live and shop. The combined rate ranges from 6.25 percent (state only, in a few areas) to 8.25 percent in some cities. When you buy something at a store or online, the tax is calculated on the purchase price and added to your bill.

The seller collects the tax from you and sends it to the state and local tax authorities each month. You do not pay sales tax directly to the government — it happens at checkout. Some purchases are taxed, others are not, and the rules differ depending on what you are buying.

Key Takeaways

  • Texas state sales tax is 6.25 percent, but your total rate is higher because cities and counties add local taxes, usually bringing the total to 7 or 8 percent.
  • Groceries, prescription medications, and medical equipment are not subject to sales tax in Texas.
  • Clothing and shoes under $100 per item are tax-free during the annual tax-free weekend in early August.
  • Online purchases from out-of-state sellers are subject to Texas sales tax if the seller has a physical presence in Texas or meets federal economic nexus thresholds.

What is taxed and what is not

Most tangible goods — items you can touch and hold — are taxed. This includes clothing, electronics, furniture, toys, and household items. Services are usually not taxed in Texas, with some exceptions. For example, labor on a car repair is not taxed, but parts are.

Several categories are exempt from sales tax. Groceries and food bought for home consumption are not taxed. Prescription medications and certain medical devices (like diabetic supplies or hearing aids) are exempt. Diapers and feminine hygiene products became tax-free in 2022. Items sold for resale by a business are not taxed if the seller has a resale certificate.

Prepared food — meals from restaurants, food trucks, or deli counters — is taxed. The line between grocery and prepared food matters. A rotisserie chicken from a grocery store deli counter is taxed; a raw chicken from the meat department is not.

Local sales tax rates by region

Your total sales tax rate depends on your location. The state contributes 6.25 percent. Cities can add up to 2 percent, and counties can add up to 2 percent. Special districts (like transit authorities or economic development zones) can add more. This means rates vary block by block in some cases.

Common combined rates in major Texas cities are around 8.25 percent in Houston and Dallas, 8.15 percent in Austin, and 8.25 percent in San Antonio. Rural areas with fewer local taxes may be closer to 7 or 7.25 percent. You can find your exact rate by entering your address on the Texas Comptroller of Public Accounts website or asking a local business.

Tax-free weekend and other exemptions

Texas holds a tax-free weekend each year in early August, usually the first full weekend of the month. During this period, clothing and shoes under $100 per item are sold without sales tax. The exemption applies to the item itself, not accessories — so a $99 shirt is tax-free, but a $15 belt is not, and a $150 coat is taxed on the full amount.

School supplies under $100 per item are also tax-free during this weekend. The list includes items like notebooks, pencils, backpacks, and calculators. Items over the $100 threshold are taxed on the full price. The exact dates change each year, so check the Comptroller's website in July to confirm.

How online and out-of-state purchases are taxed

If you buy something online from a seller outside Texas, you may still owe Texas sales tax. Large online retailers like Amazon and Walmart collect Texas sales tax on orders shipped to Texas addresses because they have warehouses or other operations in the state. Smaller sellers who do not have a physical presence in Texas are required to collect sales tax if they meet federal economic nexus thresholds — generally, if they sold more than $600,000 worth of goods nationwide in the previous year.

If a seller does not collect sales tax at checkout, Texas law technically requires you to pay use tax — a tax on items you bought out of state and brought into Texas. In practice, most individuals do not report use tax on personal purchases. However, if you buy business equipment or inventory out of state, you may be required to report and pay use tax when you file your business taxes.

Who collects and where the money goes

The seller collects sales tax at the point of sale and holds it temporarily. Each month, the seller sends the tax to the Texas Comptroller of Public Accounts. The Comptroller distributes the state portion (6.25 percent) to the state budget. Local portions go to the city and county where the purchase occurred.

Businesses file sales tax returns monthly, quarterly, or annually depending on how much tax they collect. A small business might file once a year; a large retailer files monthly. The Comptroller's office audits some businesses to verify they collected and reported the correct amount.

Frequently Asked Questions

Do I pay sales tax on groceries in Texas?

No. Groceries — food you buy to cook and eat at home — are not taxed in Texas. This includes bread, milk, vegetables, meat, and canned goods. Prepared foods like restaurant meals, deli items, and hot food from a grocery store counter are taxed.

What happens if a seller doesn't charge me sales tax?

The seller is responsible for collecting and remitting sales tax. If they fail to do so, that is their violation, not yours. You are not liable for the seller's mistake. However, if you knowingly buy something tax-free that should be taxed, you may owe use tax when you file your taxes.

Are online purchases from other states taxed?

If the seller has a physical location in Texas or meets federal sales thresholds, they must collect Texas sales tax. Large retailers do this automatically. Smaller sellers may not, in which case you technically owe use tax, though most individuals do not report it on personal purchases.

Can I use a tax-exempt certificate to avoid sales tax?

Only if you are a registered business buying items for resale or a nonprofit organization buying for charitable purposes. You must provide a valid resale certificate or nonprofit exemption certificate. Individual shoppers cannot use these certificates for personal purchases.

What is the difference between sales tax and use tax?

Sales tax is collected by the seller when you buy something. Use tax is a backup tax you owe on items you bought elsewhere and brought into Texas, if sales tax was not already paid. They are the same rate, but use tax is your responsibility to report and pay, usually when filing business or income taxes.