Texas has a statewide sales tax of 6.25 percent, plus local taxes that vary by city and county

The Texas state sales tax is 6.25 percent on most goods and services. However, the total tax you pay at checkout is usually higher because cities and counties add their own local sales taxes on top of the state rate. Your final tax rate depends on where you make the purchase. A transaction in Austin will have a different total rate than one in Houston or a small town outside Dallas.

The state rate of 6.25 percent has been in place since 1983 and does not change. What changes is the local portion, which ranges from 0 to 2 percent depending on your location. Some Texas counties have no local sales tax at all, while others stack multiple layers of local tax. You can find your exact combined rate by entering your zip code into the Texas Comptroller's online tax rate lookup tool, or by asking a cashier at any store in your area.

Key Takeaways

  • Texas state sales tax is 6.25 percent on most purchases, but your total tax rate includes local taxes added by your city or county.
  • Combined sales tax rates in Texas range from 6.25 percent to 8.25 percent depending on where you live and shop.
  • Food for home consumption, prescription medications, and certain medical devices are exempt from sales tax in Texas.
  • The Texas Comptroller's website has a tax rate lookup tool where you can enter your address and see your exact local rate.

How local taxes stack on top of the state rate

Texas allows cities and counties to impose their own sales taxes within limits set by state law. A city can add up to 2 percent, and a county can add up to 2 percent, though not all do. When you buy something, you pay the state rate plus whatever local taxes apply to that specific location. A purchase made in one part of a city might have a different rate than one made in an unincorporated area of the same county.

The combined rate you see on your receipt is the sum of all these layers. For example, if you live in a city that adds 1 percent and a county that adds 0.5 percent, your total rate is 6.25 + 1 + 0.5 = 7.75 percent. Some areas of Texas have reached the maximum combined rate of 8.25 percent. The easiest way to know your exact rate is to check the Texas Comptroller's tax rate database by zip code, or to look at a recent receipt from a store in your area.

What is and is not taxed in Texas

Most goods and services are subject to sales tax in Texas, but some categories are exempt. Food for home consumption — groceries you buy to cook and eat at home — is not taxed. This includes bread, milk, vegetables, meat, and canned goods. However, food prepared for immediate consumption, such as restaurant meals, deli sandwiches, or food from a food truck, is taxed.

Prescription medications and certain medical devices are also exempt from sales tax. Over-the-counter medications like aspirin or cold medicine are taxed, but prescription drugs are not. Clothing and shoes are taxed in Texas, unlike in some other states. Services like haircuts, repairs, and professional labor are generally taxed as well. Digital goods and software subscriptions are subject to sales tax in Texas.

Sales tax on online and out-of-state purchases

If you order something online from a retailer outside Texas, you may still owe Texas sales tax. Since 2021, most online retailers are required to collect and send Texas sales tax on purchases made by Texas residents, even if the seller is based elsewhere. This applies whether you buy from a large national retailer or a small business in another state.

The tax rate applied is the rate for your delivery address in Texas, not the seller's location. If a retailer fails to collect Texas sales tax at checkout, you may be responsible for reporting and paying it yourself through your state tax return, though this is uncommon for most consumers. When you see the final price before completing an online purchase, check whether sales tax has already been added.

Who collects and where the money goes

The retailer or service provider collects sales tax from you at the point of sale and sends it to the Texas Comptroller of Public Accounts. The Comptroller then distributes the revenue to the state general fund and to local governments according to formulas set by law. Cities and counties use their local sales tax revenue for schools, roads, public safety, and other services.

Retailers are responsible for registering with the Comptroller, collecting the correct amount of tax, and filing returns. If you believe a business charged you the wrong tax rate, you can contact the Texas Comptroller's office with details of the transaction. Most disputes are resolved by the business correcting its records or issuing a refund.

Frequently Asked Questions

What is the lowest sales tax rate in Texas?

The lowest combined rate is 6.25 percent, which is the state rate alone. This applies only in areas where the city and county have chosen not to impose local sales taxes. Most populated areas of Texas have local taxes on top of the state rate.

Do I pay sales tax on used items?

Yes, used goods are subject to sales tax in Texas when sold by a retailer. The tax applies to the sale price, not the original price. Private sales between individuals are generally not taxed, but sales through a business or dealer are.

Is gasoline taxed differently than other purchases?

Gasoline is subject to sales tax in Texas, but it also has a separate state fuel tax of 20 cents per gallon. The sales tax applies to the price of the fuel itself. You will see both taxes reflected in the total price at the pump.

Can I get a sales tax refund if I move out of Texas?

No, sales tax is not refunded based on residency changes. Once you pay sales tax on a purchase in Texas, that transaction is complete. If you are relocating, you do not receive a refund on past purchases.

How do I find the exact sales tax rate for my address?

Visit the Texas Comptroller's website and use the tax rate lookup tool. Enter your zip code or full address, and the tool will show you the combined state and local rate for that location. You can also call a local business or check a recent receipt.