Texas charges sales tax on most purchases, but the rate and what's taxed varies by location

Texas has a state sales tax of 6.25 percent. Most cities and counties add their own local sales tax on top of that, so your total rate depends on where you 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 at checkout and added to your bill.

Not everything is taxed the same way. Groceries, prescription medications, and certain medical equipment are exempt from sales tax. Some services — like haircuts or car repairs — are also tax-free. But clothing, electronics, restaurant meals, and most other goods are taxable. The rules can be confusing because what's exempt in one category might be taxed in another.

Key Takeaways

  • Texas state sales tax is 6.25 percent, but your actual rate is higher because cities and counties add local taxes on top.
  • Groceries and prescription medications are not subject to sales tax in Texas.
  • Restaurant meals, prepared foods, and takeout are taxed, but unprepared groceries are not.
  • You can find your exact local sales tax rate by entering your address on the Texas Comptroller's website or asking a cashier.

How local sales tax adds to the state rate

The 6.25 percent state rate is just the starting point. Cities can add up to 2 percent, and counties can add up to 1 percent. Some areas have both city and county taxes, which stack on top of each other. A city in one county might have a combined rate of 8.25 percent, while a neighboring city in a different county has 7.25 percent.

This means the tax you pay depends on the exact location where you make the purchase. Buying the same item in downtown Austin will cost a different amount than buying it in a suburb 10 miles away. Online purchases are taxed based on where the seller is located or, in some cases, where the item is shipped to — the rules for online sales changed in recent years and continue to shift.

What is not taxed in Texas

Groceries are the biggest category of tax-free purchases. This includes bread, milk, eggs, vegetables, meat, and other unprepared food you take home to cook. However, the moment food is prepared or ready to eat, it becomes taxable. A rotisserie chicken from the grocery store deli is taxed. A sandwich from the deli counter is taxed. Raw chicken from the meat department is not.

Prescription medications are also exempt from sales tax. Over-the-counter medicines like aspirin or cold medicine are taxed, but anything that requires a prescription slip from a doctor is not. Medical equipment prescribed by a doctor — such as wheelchairs, crutches, or diabetic testing supplies — is typically exempt as well, though you may need to show a prescription or doctor's note.

Certain services are not taxed either. Haircuts, dental work, medical office visits, and car repairs do not have sales tax added. However, if you buy a product as part of that service — like hair dye at a salon or a new part installed in your car — the product itself may be taxed depending on how the business records the transaction.

What is taxed that surprises people

Restaurant meals and takeout are fully taxed, even if you are not eating in the restaurant. A burger you pick up for takeout has sales tax added. A coffee from a café has sales tax added. This applies whether you dine in or take it with you.

Clothing is taxed in Texas, with no exemption for children's clothing or shoes. A pair of jeans, a winter coat, or sneakers all have sales tax added at checkout. Some states exempt children's clothes, but Texas does not.

Alcohol is taxed at the regular sales tax rate, plus there are additional excise taxes on beer, wine, and liquor that are separate from sales tax. Gasoline has sales tax added, though it also has state and federal fuel taxes that are built into the pump price.

Finding your exact local sales tax rate

The Texas Comptroller of Public Accounts maintains a sales tax rate lookup tool on its website. You can enter your street address or zip code and see the exact combined rate for that location. This is the most reliable way to know what you will pay, since rates can differ by a few blocks in some areas.

You can also call your city or county tax assessor's office, or simply ask a cashier at a local store. Most businesses know their local rate and can tell you immediately. If you shop online, the tax rate applied depends on the retailer's policy and where they are based, so the rate you see may differ from your local in-store rate.

Sales tax on online and out-of-state purchases

Online retailers are now required to collect and send sales tax to Texas if they have a significant presence in the state or meet certain sales thresholds. This means most major online retailers — Amazon, Walmart, Target, and others — collect Texas sales tax on purchases shipped to Texas addresses. The tax rate applied is based on your delivery address.

If you buy from a small out-of-state retailer that does not collect Texas sales tax, you are technically responsible for paying "use tax" on that purchase when you file your taxes. In practice, most individuals do not report this, but it is the law. Businesses are more likely to be audited on use tax than individuals.

Frequently Asked Questions

Is there sales tax on groceries in Texas?

No. Unprepared groceries like raw meat, vegetables, bread, and milk are not taxed. But prepared foods — rotisserie chicken, deli sandwiches, hot pizza — are taxed. The key is whether the food is ready to eat when you buy it.

Do I pay sales tax on prescription medications?

Prescription medications are exempt from sales tax. Over-the-counter drugs like aspirin or cough syrup are taxed. You may need to show your prescription to the cashier to avoid being charged tax.

What is the sales tax rate in my city?

Rates vary by location and range from 6.25 percent to 8.25 percent. Use the Texas Comptroller's online rate lookup tool, enter your address, and you will see your exact combined state and local rate.

Do I have to pay sales tax on clothes?

Yes. Texas taxes all clothing, including children's clothes and shoes. There is no exemption for any type of apparel.

Is sales tax charged on online purchases shipped to Texas?

Most major online retailers now collect and send Texas sales tax based on your delivery address. The rate applied matches your local combined rate. Some very small retailers may not collect it, but the trend is toward all retailers collecting it.