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

Texas charges a state sales tax of 6.25 percent on most goods and some services. On top of that, your city or county may add its own local sales tax—usually between 0.5 and 2 percent. The total you pay at checkout depends on where you are in Texas. A purchase in Houston will have a different tax rate than the same purchase in Dallas or a small town outside Austin.

Sales tax in Texas is collected by the business at the point of sale. You do not file a separate form or send money to the state yourself unless you own a business. The tax appears on your receipt as a line item, and the total price you pay includes it.

Key Takeaways

  • Texas state sales tax is 6.25 percent, and local taxes on top of that range from 0.5 to 2 percent depending on your city and county.
  • Groceries, prescription medicines, and medical devices are exempt from sales tax in Texas.
  • Services like haircuts, repairs, and professional fees are generally not taxed, but labor charges on taxable goods sometimes are.
  • Online purchases from out-of-state sellers are subject to Texas sales tax if the seller has a physical presence in the state or meets federal thresholds.
  • The Texas Comptroller of Public Accounts publishes a tax rate lookup tool where you can enter your address and see your exact local rate.

How to find your exact local sales tax rate

Your total sales tax rate depends on your address. The state rate is always 6.25 percent, but cities and counties add on top of that. To find out what you actually pay, use the Texas Comptroller's tax rate lookup tool on the Comptroller's website. Enter your street address, and it will show you the combined state and local rate for that location.

If you are shopping in a different city or county, the rate changes. A store in one part of town may have a different rate than a store five miles away if they cross a city or county line. This matters most if you are making a large purchase and considering driving to a different area—the savings from a lower tax rate may not offset the gas and time.

What is and is not taxed in Texas

Not everything you buy is subject to sales tax. Groceries—food you cook at home—are exempt. This includes bread, milk, eggs, vegetables, and meat from a grocery store. Restaurant meals and prepared foods are taxed. Prescription medicines are also exempt, as are medical devices like diabetic supplies and hearing aids when prescribed by a doctor.

Most services are not taxed in Texas. A haircut, a plumbing repair, a doctor's visit, or an accountant's fee has no sales tax. However, if you buy a service that includes a taxable product—like a repair that requires a new part—the part itself is taxed, and sometimes the labor is too, depending on how the business breaks down the charge.

Clothing is taxed in Texas, including shoes and accessories. Utilities like electricity and water are not taxed. Gasoline is taxed, but the tax is built into the pump price and does not appear separately on your receipt.

Sales tax on online and out-of-state purchases

If you order something online from a company based outside Texas, you may still owe Texas sales tax. Large retailers like Amazon, Walmart, and Target have a physical presence in Texas or meet federal sales tax thresholds, so they collect Texas sales tax on your order. Smaller online sellers may not, depending on their sales volume and whether they have warehouses or offices in the state.

The rule changed in 2018 when the U.S. Supreme Court ruled that states can require online sellers to collect sales tax even if they have no physical location there. Texas now requires sellers with more than a certain amount of annual sales to collect the tax. If a seller does not collect it at checkout, you are technically responsible for paying it yourself through a form called a use tax return—but most individual shoppers do not file this form, and the state does not pursue them for small amounts.

Sales tax on vehicles and large purchases

When you buy a car in Texas, sales tax applies to the purchase price. The rate is your local combined rate, the same as any other purchase. If you trade in a vehicle, the tax is calculated on the net amount—the sale price minus the trade-in value. You pay the tax when you register the vehicle with the Texas Department of Motor Vehicles, not at the dealership.

If you buy a boat, aircraft, or other vehicle, the same rule applies. The tax is due at the time of registration. If you are buying from a private seller rather than a dealer, you still owe the tax when you register the vehicle in your name.

Who collects sales tax and where it goes

Businesses collect sales tax from you at the register and send it to the Texas Comptroller of Public Accounts, the state agency that oversees tax collection. The Comptroller then distributes the money to the state general fund, local governments, and special districts like school districts and transit authorities. Each city and county keeps its portion of the local tax it collects.

If you own a business, you register with the Comptroller, collect sales tax from customers, and file monthly or quarterly reports showing how much you collected and how much you owe. Businesses that do not collect and remit sales tax can face penalties and interest.

Sales tax exemptions for businesses and organizations

Certain organizations do not pay sales tax on their purchases. Nonprofit organizations with a valid exemption certificate can buy goods without paying sales tax. Schools, hospitals, and charities often may have access to. Resellers—businesses that buy goods to resell them—do not pay sales tax on their inventory; instead, they collect it from their customers.

If you are buying something for a nonprofit or resale, you will need to provide an exemption certificate to the seller. The seller will not charge you sales tax if the certificate is valid. Falsely claiming an exemption is tax fraud and can result in criminal charges.

Frequently Asked Questions

Is sales tax included in the price shown on the shelf?

No. The price on the shelf or tag is the pre-tax price. Sales tax is added at checkout. This is why the total you pay is higher than the sticker price.

Do I pay sales tax if I buy something online from a Texas business?

Yes, if the business collects Texas sales tax. Most established online retailers do. If they do not, you may owe use tax, though enforcement for individual purchases is rare.

Can I get a refund of sales tax if I return something?

Yes. When you return an item, the store refunds the full amount including tax. Keep your receipt to show the tax you paid.

What is the difference between sales tax and use tax?

Sales tax is collected by the seller when you buy something. Use tax is what you owe if you buy something without paying sales tax—for example, from an out-of-state seller who did not collect it. You are supposed to report and pay use tax yourself, but most individuals do not.

Do I pay sales tax on services like haircuts or car repairs?

No. Services themselves are not taxed in Texas. However, if the service includes a product—like a new part in a repair—that product may be taxed depending on how the business itemizes the charge.