Texas charges 6.25% state sales tax, plus local taxes that vary by city and county

The state sales tax rate in Texas is 6.25%. This is the baseline tax applied to most taxable purchases across the state. However, your total sales tax is almost always higher because cities and counties add their own local taxes on top of the state rate.

The combined rate you pay depends on where you make the purchase. A transaction in Austin will have a different total tax than the same purchase in Houston or Dallas, because each city and county has chosen different local tax rates. Your receipt shows the combined total, not the state portion alone.

Texas does not have a state income tax, which is why sales tax is the primary way the state funds services. This means sales tax rates matter more to your budget in Texas than they do in states with income tax.

Key Takeaways

  • Texas state sales tax is 6.25%, but your actual rate is higher because local taxes stack on top of it.
  • Combined rates range from 8.25% to 8.875% in most major cities, depending on city and county decisions.
  • Some items are not taxed at all in Texas, including groceries, prescription medications, and medical devices.
  • Your receipt shows the final combined rate you paid, which is what matters for your purchase.

How local taxes stack on top of the state rate

Texas allows cities and counties to add their own sales taxes. A city can add up to 2%, and a county can add up to 1%, on top of the 6.25% state rate. Some special districts (like transit authorities) can add even more for specific purposes.

This means the combined rate in your area is the sum of all these layers. In Austin, for example, the combined rate is 8.25% because the city adds 2% and the county adds 0% to the state's 6.25%. In Houston, the combined rate is 8.25% as well, but the breakdown is different: the state's 6.25%, the city's 2%, and the county's 0%. In some areas with special district taxes, the combined rate reaches 8.875%.

You cannot avoid the local portion by shopping in a different city if you live in one jurisdiction. Texas taxes are based on where the sale happens, not where you live. If you buy something in a store located in a high-tax city, you pay that city's rate.

What is and is not taxed in Texas

Not everything you buy is subject to sales tax in Texas. Groceries — food you prepare at home — are not taxed. This includes bread, milk, vegetables, meat, and canned goods. Restaurant meals and prepared foods are taxed, because they are considered prepared for immediate consumption.

Prescription medications are not taxed in Texas. Over-the-counter medications like aspirin or cold medicine are taxed. Medical devices prescribed by a doctor, such as diabetic testing supplies or hearing aids, are not taxed. Cosmetics and toiletries are taxed.

Clothing and shoes are taxed in Texas, with no exemption for children's clothing or back-to-school purchases. Services like haircuts, repairs, and labor are generally not taxed, though some specific services have different rules. Digital goods like e-books, software, and streaming subscriptions are taxed.

Finding the exact rate for your area

Your city and county combination determines your rate. If you know your city and county, you can calculate it: start with 6.25%, add your city's rate (usually 0%, 1%, or 2%), and add your county's rate (usually 0%, 0.5%, or 1%). Some areas also have special district taxes that add another 0.125% or more.

The Texas Comptroller of Public Accounts maintains a searchable database of all local tax rates by jurisdiction. You can enter your city name or ZIP code to see the exact combined rate. Your city's tax assessor's office can also confirm the rate for your specific address.

When you shop online and the seller ships to a Texas address, the tax rate applied depends on the seller's location and Texas tax law. Most online retailers now collect Texas sales tax on all purchases shipped to the state, using the tax rate for the delivery address.

Why rates differ between cities

Cities and counties set their own local tax rates based on their budget needs and voter approval. A city that has approved a 2% local tax rate has chosen to fund services that way, while a neighboring city with a 1% rate has made a different choice. These decisions are made through local government processes, not by the state.

Some areas have added temporary sales tax increases to fund specific projects like transit systems, stadiums, or school improvements. These can expire after a set period, which means the combined rate in that area may change. Check your local government's website if you want to know whether any temporary taxes are in effect.

The variation between cities is why two identical purchases in different Texas cities can have different tax amounts. This is normal and reflects local funding decisions, not an error on the receipt.

Frequently Asked Questions

Is Texas sales tax the same everywhere in the state?

No. The state rate is 6.25% everywhere, but cities and counties add different amounts. Combined rates range from 8.25% to 8.875% in most areas. Use the Texas Comptroller's database or ask your city tax office for your exact rate.

Are groceries taxed in Texas?

No. Food you buy to prepare at home, like bread, milk, and vegetables, is not taxed. Restaurant meals and prepared foods are taxed because they are ready to eat.

Do I pay sales tax on online purchases shipped to Texas?

Yes. Most online retailers now collect Texas sales tax on orders shipped to Texas addresses. The rate applied is based on your delivery address, not the seller's location.

What if I buy something in one Texas city but live in another?

You pay the sales tax rate of the city where the purchase happens, not where you live. Texas taxes based on the location of the sale.

Can the sales tax rate change?

Yes. Cities and counties can vote to change their local tax rates, and some temporary taxes expire after a set period. Check your local government's website if you think your rate may have changed recently.