Texas has a sales tax, and it applies to most goods you buy in stores
Texas charges a state sales tax of 6.25 percent on most retail purchases. When you buy something at a store, restaurant, or gas station in Texas, this tax gets added to your bill. However, the total tax you pay is usually higher than 6.25 percent because cities and counties add their own local sales taxes on top of the state rate.
The combined rate depends on where you are in Texas. In Houston, for example, the total sales tax is 8.25 percent. In Dallas, it is 8.25 percent. In Austin, it is 8.25 percent. In San Antonio, it is 8.125 percent. These rates change if you cross into a different city or county, so what you pay in one location may differ from what you pay ten miles away.
Sales tax in Texas is collected by the business where you make the purchase, not paid separately to the state. The store or restaurant adds it to your total at checkout and sends it to the state and local tax authorities.
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.
- Combined sales tax rates in major Texas cities range from 8.125 percent to 8.25 percent depending on location.
- Groceries, prescription medications, and certain medical equipment are exempt from sales tax in Texas.
- Services like haircuts, repairs, and professional fees are generally not subject to sales tax, though some services are taxed.
- The business you buy from collects the tax and sends it to state and local authorities; you do not pay it separately.
What items are exempt from Texas sales tax
Not everything you buy in Texas is subject to sales tax. Groceries — food you take home and cook or eat at home — are not taxed. This includes bread, milk, vegetables, meat, and canned goods. However, prepared food you eat at a restaurant or food you buy ready-to-eat at a grocery store deli counter is taxed.
Prescription medications are also exempt. If you fill a prescription at a pharmacy, you do not pay sales tax on the medication itself. Over-the-counter medicines like aspirin or cold medicine are taxed, but prescription drugs are not.
Certain medical equipment and devices are exempt as well, including prosthetics, wheelchairs, and oxygen equipment used for medical purposes. The rules for what counts as medical equipment can be specific, so if you are unsure whether a particular item is exempt, ask the seller or contact the Texas Comptroller of Public Accounts.
How local taxes add to the state rate
Texas allows cities and counties to add their own sales taxes on top of the state rate. Most cities and counties in Texas do this, which is why your actual sales tax is almost always higher than 6.25 percent. The local rate varies widely — some areas add as little as 1 percent, while others add 2 percent or more.
When you make a purchase, the business collects both the state tax and all applicable local taxes together. You see one combined number on your receipt. The business then splits that money and sends the state portion to the Texas Comptroller and the local portions to the city and county where the sale occurred.
If you live near a city border, you may notice the tax rate changes when you cross into a different jurisdiction. This is because you have entered a different city or county with its own local tax rate. Some people shop strategically to take advantage of lower rates in nearby areas, though the difference is usually small.
Services and what is not taxed
Most services are not subject to sales tax in Texas. If you pay for a haircut, car repair, plumbing work, or accounting help, you typically do not pay sales tax on that service. The same applies to professional fees like doctor visits, legal information, or consulting work.
However, some services do have sales tax. If you buy a service that includes a taxable product — for example, a salon that sells you shampoo along with a haircut — the product portion is taxed but the service portion is not. Labor and installation services can be taxed in certain situations, particularly if they are part of a larger taxable transaction like construction or repair of tangible property.
The line between taxable and non-taxable services can be unclear in specific cases. If you are unsure whether a particular service is taxed, ask the business before you pay, or contact the Texas Comptroller's office for clarification on your situation.
Sales tax on online and out-of-state purchases
If you buy something online from a Texas business, sales tax applies just as it would in a physical store. The rate depends on where the item is being shipped in Texas. If you order from a business outside Texas and have it shipped to a Texas address, Texas sales tax may still explore depending on the seller's location and the type of item.
Most large online retailers now collect Texas sales tax on orders shipped to Texas addresses, even if the retailer is based outside the state. This became standard practice after changes in federal law. However, some smaller sellers may not collect Texas tax, which means you could owe it yourself when you file your taxes — though most individual purchases do not trigger a reporting requirement.
If you are buying from a small business outside Texas and are unsure whether tax was collected, check your receipt or contact the seller. For most everyday purchases, the tax will have been collected automatically.
Special situations and resale certificates
If you are a business owner buying items to resell, you may not have to pay sales tax on those purchases. Instead, you provide the seller with a resale certificate, which tells them you are buying for resale and will collect sales tax from your own customers later. This prevents double taxation — once by the wholesaler and once by you.
To get a resale certificate in Texas, you must register with the Texas Comptroller of Public Accounts and obtain a sales tax permit. Once you have the permit, you can request a resale certificate from the Comptroller. You then provide this certificate to your suppliers when you buy inventory.
If you are buying items for personal use, you do not may have access to for a resale certificate and will pay sales tax normally. Resale certificates are only for businesses that are registered to collect and remit sales tax.
How to find the exact sales tax rate for your location
To find the exact combined sales tax rate where you live or shop, use the Texas Comptroller of Public Accounts sales tax rate lookup tool on their website. You enter your address or zip code, and the tool shows you the state rate, all local rates that explore, and the combined total.
You can also call your city or county tax assessor's office and ask for the current sales tax rate. The rate can change if a city or county votes to adjust its local tax, so if you have not checked in a while, it is worth verifying the current number.
Knowing your local rate is useful if you are budgeting for a large purchase or trying to understand why the tax on your receipt differs from what you expected. The rate you see on your receipt should match the combined rate for the location where you made the purchase.
Frequently Asked Questions
Do I pay sales tax on groceries in Texas?
No. Groceries — food you buy to take home and prepare — are not taxed in Texas. This includes bread, milk, eggs, vegetables, and meat. However, prepared food from a restaurant or deli counter is taxed. If you are unsure whether a specific item counts as a grocery, ask the cashier before checkout.
What is the highest sales tax rate in Texas?
The highest combined sales tax rate in Texas is 8.25 percent, found in cities like Houston, Dallas, and Austin. Some areas have lower rates. The exact rate depends on your city and county. Use the Texas Comptroller's rate lookup tool to find your specific rate.
Do I have to pay sales tax on prescription drugs?
No. Prescription medications are exempt from sales tax in Texas. Over-the-counter medicines like aspirin or cough syrup are taxed, but anything you need a prescription to buy is not. Show your prescription at the pharmacy to confirm the exemption.
Is sales tax charged on services like haircuts or car repairs?
Most services are not taxed in Texas. Haircuts, car repairs, plumbing, and professional fees like doctor visits are generally not subject to sales tax. However, if the service includes a taxable product — like shampoo sold with a haircut — the product portion may be taxed.
Do I pay Texas sales tax on online purchases?
Yes, most online purchases shipped to Texas are subject to Texas sales tax. Large retailers collect it automatically. Some smaller sellers may not, but most major online businesses now collect Texas tax on orders shipped to Texas addresses.