Texas Sales Tax Rate and What It Covers
Texas has a state sales tax rate of 6.25 percent. When you buy something at a store or online, you pay this rate on the purchase price. However, your total tax bill is often higher because cities and counties add their own local sales taxes on top of the state rate.
The combined rate you actually pay depends on where you are in Texas. A purchase in Austin might have a different total tax rate than the same purchase in Houston or Dallas, because each city and county sets its own local rate. Combined rates across Texas range from 6.25 percent (state only, in areas with no local tax) to over 8 percent in some cities.
Not everything is taxed. Groceries, prescription medications, and certain medical equipment are exempt from sales tax in Texas. Clothing is also exempt. But restaurant meals, prepared foods, and non-prescription items are taxed at the full rate.
Key Takeaways
- Texas state sales tax is 6.25 percent, but your actual rate includes local city and county taxes added on top.
- To find your exact local rate, search "[your city] sales tax rate" or check your city or county tax assessor's website.
- To calculate tax on a purchase, multiply the price by your local rate as a decimal (for example, 8.25 percent = 0.0825).
- Groceries, prescription drugs, and clothing are not taxed; restaurant meals and prepared foods are taxed at the full rate.
- Online purchases from out-of-state sellers may or may not be taxed depending on whether the seller has a physical presence in Texas.
Finding Your Local Sales Tax Rate
Your local rate is the state rate plus whatever your city and county add. The easiest way to find it is to search online for "[your city name] sales tax rate" or "[your county name] sales tax rate." Most city and county tax assessor websites list the current combined rate.
You can also call your city or county tax assessor's office directly. They can tell you the exact rate for your address, since rates can vary even within a city depending on which tax district you are in. The Texas Comptroller of Public Accounts website also has a sales tax rate lookup tool where you can enter your zip code.
If you are buying something online and the seller ships to multiple states, the tax rate applied depends on the delivery address, not where the seller is located. Enter your zip code at checkout to see the rate that will be charged.
The Math: Step-by-Step Calculation
To calculate sales tax, multiply the price of the item by your local tax rate expressed as a decimal. Here is the process:
- Find the item price (before tax).
- Find your local combined sales tax rate as a percentage.
- Convert the percentage to a decimal by dividing by 100. For example, 8.25 percent becomes 0.0825.
- Multiply the item price by the decimal. The result is the tax amount.
- Add the tax amount to the original price to get the total you pay.
Example: You buy a shirt for $40 in a city with an 8.25 percent combined sales tax rate. Multiply $40 by 0.0825. The tax is $3.30. Your total is $40 + $3.30 = $43.30.
For multiple items, add up all the prices first, then multiply the total by the tax rate. This gives you the same result as calculating tax on each item separately and adding them together.
What Is and Is Not Taxed in Texas
Texas exempts certain items from sales tax. The main categories are groceries (unprepared food you cook at home), prescription medications, and clothing. Diapers, feminine hygiene products, and certain medical devices are also exempt.
Items that are always taxed include restaurant meals, prepared foods from a deli or bakery, non-prescription drugs, household supplies, and personal care items like shampoo or deodorant. Alcohol and tobacco are taxed at the standard rate (though tobacco may have additional state taxes).
The line between taxed and exempt can be unclear. For example, a rotisserie chicken from a grocery store deli is taxed as prepared food, but raw chicken from the meat counter is not. If you are unsure whether something is taxed, ask the cashier or check the receipt after purchase.
Online and Out-of-State Purchases
Whether you pay sales tax on an online purchase depends on whether the seller has a physical presence (a store, warehouse, or office) in Texas. If they do, they must collect and send Texas sales tax. If they do not, they typically do not collect tax at the time of purchase.
However, Texas law requires you to pay use tax on untaxed out-of-state purchases. Use tax is the same rate as sales tax, and you owe it whether or not the seller collected it. Most people do not pay use tax voluntarily, but it is technically your responsibility. You can report use tax on your Texas tax return if you want to.
Large online retailers like Amazon now collect Texas sales tax on most purchases because they have warehouses in the state. Smaller sellers may not. Check your receipt or the checkout page to see whether tax was added.
Sales Tax on Services and Special Situations
Most services are not taxed in Texas. Haircuts, car repairs, plumbing, and consulting work are generally not subject to sales tax. However, some services that include a product (like a manicure with nail polish or a car wash with wax) may be taxed if the product is the main part of what you are paying for.
Rental items are taxed. If you rent a car, equipment, or furniture, you pay sales tax on the rental fee. The tax rate is your local combined rate, the same as for purchases.
Shipping and handling charges are usually taxed if the item itself is taxable. Some online sellers include shipping in the taxable price; others tax it separately. Check the receipt to see how it was calculated.
Frequently Asked Questions
Do I pay sales tax on groceries in Texas?
No. Unprepared food you buy to cook at home is exempt from sales tax. This includes meat, produce, bread, and canned goods. However, prepared foods like rotisserie chicken, deli sandwiches, and bakery items are taxed. Hot foods and foods meant to eat right away are considered prepared.
What if the tax rate changes during the year?
Sales tax rates can change when cities or counties vote to raise or lower their local rate. Changes usually take effect on the first day of a month. If you are budgeting for a large purchase, check your local rate a few days before you buy to make sure it has not changed.
How do I know if clothing is taxed?
Clothing is not taxed in Texas. This includes shoes, hats, and accessories worn on the body. However, items like handbags, belts, and jewelry are sometimes taxed because they are considered accessories rather than clothing. If you are unsure, ask the cashier before you pay.
Can I get a refund if I overpaid sales tax?
If you were charged tax on an exempt item like groceries or prescription medication, you can ask the store for a refund at the time of purchase or return with your receipt. For larger errors, contact the store's customer service. You cannot file a claim with the state for individual purchase errors.
Do I owe sales tax on items I buy out of state and bring into Texas?
Yes, technically. You owe use tax on untaxed purchases brought into Texas. However, this is rarely enforced for individual purchases. If you buy something in another state where it was not taxed, you are responsible for paying the equivalent Texas tax, but most people do not report it unless the purchase is very large.