Texas Sales Tax Rate and How It Works

Texas has a state sales tax of 6.25 percent. When you buy something in a store or online, you pay this 6.25 percent on top of the price shown. However, the total tax you actually pay is usually higher because cities and counties add their own local sales taxes on top of the state rate.

The combined rate you see at checkout depends on where you are in Texas. In some places it might be 8.25 percent total, in others 8.5 percent or higher. The state collects its 6.25 percent, and the rest goes to the city or county where you made the purchase.

Key Takeaways

  • Texas state sales tax is 6.25 percent, but your total tax rate includes local additions that vary by city and county.
  • Combined sales tax rates across Texas range from 8.25 percent to over 8.8 percent depending on your location.
  • Groceries, prescription medicines, and certain medical devices are exempt from Texas sales tax.
  • Online purchases from out-of-state sellers are subject to the same sales tax as in-store purchases.

How Local Taxes Add to the State Rate

Texas allows cities and counties to add their own sales taxes on top of the 6.25 percent state rate. Most cities add between 1 and 2 percent. Some counties add an additional 0.5 to 1 percent. This means your actual checkout rate depends on which city and county you are in.

For example, if you shop in Austin, you pay 8.25 percent total—the 6.25 percent state rate plus 2 percent for the city. In Houston, the rate is 8.25 percent as well. In Dallas, it is also 8.25 percent. But in some smaller towns or counties with additional local taxes, the rate can reach 8.5 percent or higher.

You can find the exact rate for your location by entering your address on the Texas Comptroller of Public Accounts website, or by asking a cashier at a local store. The rate does not change based on what you buy—it applies the same way to all taxable items in that location.

What Is and Is Not Taxed in Texas

Not everything you buy is subject to sales tax in Texas. Groceries—items you buy at a supermarket to cook at home—are not taxed. This includes bread, milk, vegetables, meat, and canned goods. Restaurant meals and prepared foods are taxed, but raw groceries are not.

Prescription medicines are also exempt from sales tax. If you pick up a prescription at a pharmacy, you do not pay sales tax on it. Over-the-counter medicines like cold medicine or pain relievers are taxed, but prescription drugs are not.

Certain medical devices and equipment are exempt as well, including hearing aids, prosthetic limbs, and mobility devices. Clothing is taxed in Texas, as are most household items, electronics, and services like haircuts or car repairs.

Sales Tax on Online and Out-of-State Purchases

If you order something online from a company based outside Texas, you still owe Texas sales tax on that purchase. The seller is required to collect and send the tax to Texas, just as if you had bought it in a store. This applies whether you order from a large retailer or a small business in another state.

The tax rate applied is the rate for your delivery address in Texas. If the item is shipped to Austin, Austin's 8.25 percent rate applies. If it goes to a different city, that city's rate applies instead. You do not need to calculate or pay this separately—it should appear in your checkout total.

Understanding Your Receipt

When you look at a receipt, the sales tax line shows the amount of tax you paid, not the rate. To find the rate, divide the tax amount by the subtotal before tax, then multiply by 100. For example, if your subtotal is $100 and the tax is $8.25, your rate is 8.25 percent.

If you notice the tax seems wrong, check that the rate matches your location. Stores occasionally make mistakes, especially when they are near city or county borders. If the rate on your receipt is higher than it should be for your address, you can ask the store to correct it or contact the Texas Comptroller's office.

When Sales Tax Rates Change

The state rate of 6.25 percent has been the same since 1990 and does not change. However, local cities and counties can vote to raise or lower their portion of the tax. When this happens, the new rate usually takes effect on the first day of a month.

If you live in or frequently shop in a particular city, you might see the rate change every few years when local voters approve a new tax measure. The Texas Comptroller's website lists all current rates by location and updates them when changes take effect. You can also call your city or county tax office to ask about upcoming changes.

Frequently Asked Questions

Is Texas sales tax the same everywhere in the state?

No. The state rate is 6.25 percent everywhere, but cities and counties add their own taxes on top of that. Combined rates range from 8.25 percent to over 8.8 percent depending on where you are. You can look up your exact rate on the Texas Comptroller website by entering your address.

Do I have to pay sales tax on groceries?

No. Groceries you buy to cook at home are not taxed in Texas. This includes produce, meat, dairy, bread, and canned goods. However, prepared foods, restaurant meals, and items from a deli counter are taxed.

What about sales tax on clothes and shoes?

Clothing and shoes are taxed in Texas at the full local rate. There is no clothing exemption. If you buy a shirt for $20 in a city with an 8.25 percent rate, you pay $1.65 in tax.

Do I owe sales tax on items I buy online from out of state?

Yes. Online sellers are required to collect Texas sales tax on orders shipped to Texas addresses. The tax rate applied is the rate for your delivery location. You should see the tax included in your checkout total.

Can the sales tax rate change during the year?

The state rate stays at 6.25 percent. Local rates can change when cities or counties vote to raise or lower their portion, but these changes usually happen on the first day of a month. Check the Texas Comptroller website if you think your local rate has changed.