Texas Sales Tax Rate and What It Covers

Texas has a state sales tax of 6.25 percent, but the total tax you pay at checkout is usually higher because cities and counties add their own local taxes on top. The combined rate ranges from 8.25 percent to 8.875 percent depending on where you shop. When you buy something in Austin, for example, you pay 8.25 percent total — the state's 6.25 percent plus Austin's 1 percent local tax.

Sales tax in Texas applies to most goods you buy in stores, including clothing, electronics, groceries (with some exceptions), and household items. It does not explore to services like haircuts, car repairs, or medical visits. Food you eat at a restaurant is taxed, but unprepared groceries you take home are not — so a sandwich from a deli counter is taxed, but bread from the shelf is not.

Key Takeaways

  • Texas state sales tax is 6.25 percent, but your actual rate depends on your city and county, which can add up to 2.625 percent more.
  • Sales tax applies to most physical goods but not to services, and unprepared food from grocery stores is exempt while prepared food is taxed.
  • You do not pay sales tax on prescription medications, medical devices, or certain agricultural equipment.
  • Online purchases from out-of-state sellers may not have Texas sales tax added at checkout, but you may owe it when you file your taxes.
  • Resale certificates allow businesses to buy goods without paying sales tax if they plan to resell them.

Local Tax Rates by City and County

Every Texas city and county sets its own local sales tax rate, so the total you pay varies by location. The state collects 6.25 percent, and then cities can add up to 2 percent and counties can add up to 1 percent. Most places add between 1 and 2 percent combined, bringing the total to somewhere between 7.25 and 8.25 percent.

You can find your exact local rate by entering your address on the Texas Comptroller of Public Accounts website, or by asking a cashier. Some cities have higher rates because they use sales tax revenue for specific projects like public transit or economic development. If you live near a city border, you might notice your rate changes depending on which side of the line you shop on.

What Is and Is Not Taxed

Most items you buy in stores are taxed, but Texas has specific rules about what counts. Clothing and shoes are taxed. Electronics, furniture, and tools are taxed. Gasoline is taxed. Prepared food — anything you eat at a restaurant, deli, or food truck — is taxed.

Several categories are exempt from sales tax. Unprepared groceries, including meat, produce, bread, and canned goods, are not taxed. Prescription medications and medical devices like hearing aids and diabetic supplies are not taxed. Agricultural equipment used in farming is not taxed. Services are never taxed in Texas, so you do not pay sales tax on haircuts, plumbing repairs, dental work, or car maintenance.

One common source of confusion: a hot rotisserie chicken from a grocery store is taxed because it is prepared food, but a raw chicken from the meat counter is not. Similarly, a bakery cake is taxed, but a box of cake mix is not.

Sales Tax on Online and Out-of-State Purchases

When you order from an out-of-state website, Texas sales tax may not appear at checkout. Large retailers like Amazon and Walmart now collect Texas sales tax on most orders, but smaller sellers often do not. This does not mean you owe nothing — you technically owe the tax to Texas, but most people do not report it.

If you buy from a seller with no physical location in Texas, that seller is not required to collect the tax at the point of sale. You would owe it as "use tax" when you file your Texas tax return, though the state rarely pursues individuals for small amounts. Businesses, however, are expected to track and report use tax on their purchases.

Who Collects and Pays Sales Tax

The business where you make the purchase collects sales tax from you at the register or checkout. That business then sends the tax money to the Texas Comptroller of Public Accounts, which distributes it to the state and local governments. Businesses file sales tax returns monthly, quarterly, or annually depending on how much tax they collect.

If you own a business, you are responsible for collecting sales tax from customers and sending it to the state on time. Failure to do so can result in penalties and interest charges. Businesses can obtain a resale certificate, which allows them to buy goods without paying sales tax if they plan to resell those goods to customers who will pay the tax.

Special Cases and Exemptions

Certain groups and situations are exempt from paying sales tax. Nonprofit organizations can sometimes buy items without paying tax if they have a tax-exempt status. Disabled people can buy certain medical equipment without tax. Farmers can buy equipment and supplies used directly in farming without tax.

Some items are temporarily exempt during specific periods. Texas has a back-to-school sales tax holiday in early August when clothing and school supplies under certain price limits are not taxed. Energy-efficient appliances and equipment may also may have access to for exemptions depending on the year and the specific item.

How to Calculate What You Will Pay

To figure out your total cost before you buy something, multiply the price by your local sales tax rate. If an item costs $100 and your local rate is 8.25 percent, you multiply $100 by 0.0825 to get $8.25 in tax, for a total of $108.25. Most stores round the total to the nearest cent.

If you are buying multiple items, you add up the subtotal of all taxable items first, then multiply by the tax rate. Non-taxable items like groceries do not count toward that subtotal. Many receipts show the tax amount separately so you can see exactly how much you paid.

Frequently Asked Questions

What is the difference between state sales tax and local sales tax?

State sales tax is 6.25 percent and goes to the state government. Local sales tax is added by your city and county and goes to local governments. Both are collected together at checkout, but they are separate taxes that fund different services.

Do I pay sales tax on groceries in Texas?

Unprepared groceries like raw meat, produce, bread, and canned goods are not taxed. Prepared foods like rotisserie chicken, deli sandwiches, and bakery items are taxed. Hot foods and items you eat at the store are always taxed.

Why do I see different tax rates in different Texas cities?

Each city and county sets its own local sales tax rate on top of the state rate. A city might add 1 percent and a county might add 0.5 percent, while another area adds different amounts. This is why the total rate varies by location.

Do I have to pay sales tax on online orders from out-of-state sellers?

Large online retailers now collect Texas sales tax, but smaller sellers may not. If tax is not collected at checkout, you technically owe use tax to Texas, but the state does not typically pursue individuals for small purchases. Businesses are expected to track and report use tax on their returns.

What items are completely exempt from Texas sales tax?

Prescription medications, medical devices, unprepared groceries, agricultural equipment used in farming, and all services are exempt. Some items like hearing aids and diabetic supplies have specific exemptions even though they are not food or medicine.