Texas has a 6.25% state sales tax, but your total rate depends on local additions

The state of Texas charges 6.25% sales tax on most goods and some services. However, that is not the rate you pay at checkout. Cities and counties in Texas can add their own local sales taxes on top of the state rate, so your actual rate ranges from 6.25% to 8.25% depending on where you shop. A purchase in one Texas city might cost you a different total tax than the same purchase across the county line.

The state collects its 6.25% and sends a portion to local governments. Cities can add up to 2%, and counties can add up to 1%, though not all do. Some areas stack both a city and county tax, which is why you see rates like 8.25% in certain places. The Texas Comptroller of Public Accounts publishes the exact rate for every city and county so you can look up what you owe where you live.

Key Takeaways

  • Texas state sales tax is 6.25%, but cities and counties add local taxes that raise the total to between 6.25% and 8.25%.
  • You can find your exact local rate on the Texas Comptroller website by entering your city or zip code.
  • Sales tax in Texas applies to most physical goods, but not to groceries, prescription medicines, or most services.
  • Some items like clothing under $100 and certain medical devices are exempt from sales tax in Texas.
  • Online purchases from out-of-state sellers are subject to Texas sales tax if the seller has a physical presence in the state.

How to find your exact local sales tax rate

The Texas Comptroller of Public Accounts maintains a searchable database called the Sales Tax Rate Lookup on its website (comptroller.texas.gov). Enter your city name or zip code, and the tool shows you the exact combined rate for that location. This is the fastest way to know what you will pay, because rates can differ by a few blocks in some areas where city and county boundaries overlap.

If you are shopping online or planning a purchase in a different part of Texas, use this tool before you assume the rate. A city might have a 7.25% rate while a neighboring unincorporated area in the same county has only 6.25%. The difference adds up on large purchases.

What is and is not taxed in Texas

Sales tax in Texas applies to tangible goods — clothing, electronics, furniture, cars, and most other physical items you can touch and take home. It also applies to some services, including repairs, labor, and installation. However, several categories are exempt, meaning you do not pay sales tax on them.

Groceries are not taxed in Texas. This includes food you buy at a supermarket to cook at home, but not prepared food, restaurant meals, or hot food from a deli counter. Prescription medicines are also exempt. Certain medical devices and equipment prescribed by a doctor may be exempt as well, though the rules are specific — over-the-counter pain relievers and vitamins are taxed.

Clothing and footwear under $100 per item are exempt from Texas sales tax. If a shirt costs $99, you pay no tax. If it costs $101, you pay tax on the full amount. This applies to each individual item, not to your total purchase. Children's clothing under $100 is also exempt, regardless of where it is sold.

Sales tax on online and out-of-state purchases

If you buy something online from a company that has a warehouse, office, or other physical location in Texas, you owe Texas sales tax on that purchase. This is true even if the company is based elsewhere. The seller is required to collect the tax at checkout.

If you buy from an out-of-state seller with no physical presence in Texas, the seller may not collect Texas sales tax. However, Texas law requires you to pay use tax on those purchases yourself — it is the same rate as sales tax, just collected differently. Most people do not report use tax, but it is technically owed. If you are a business owner, you should track these purchases and report them on your tax return.

How sales tax is collected and reported

Retailers collect sales tax at the point of sale and hold it temporarily. They then file a sales tax return with the Texas Comptroller, usually monthly or quarterly depending on the size of the business. The Comptroller distributes the state portion and sends the local portions to the cities and counties where the tax was collected.

If you are a business owner, you will need a Texas sales tax permit to collect tax from customers. You explore for this through the Comptroller's office. Once you have the permit, you are responsible for collecting the correct rate for each location where you make sales, filing returns on time, and paying what you owe. The penalties for not collecting or reporting sales tax correctly can be steep.

Special situations and exemptions for businesses

Certain businesses and organizations do not pay sales tax on their purchases. Nonprofits with a valid exemption certificate, government agencies, and some agricultural operations can buy goods without paying sales tax. If you run a business that qualifies, you will need to register with the Comptroller and obtain an exemption certificate to show to sellers.

Resellers — people who buy goods to resell them — do not pay sales tax on their inventory purchases. Instead, they collect tax from their customers. To buy without paying tax, you need a resale certificate from the Texas Comptroller. Without it, you pay sales tax on everything, even if you plan to resell it.

Recent changes and what to watch for

Texas sales tax rates and rules change occasionally when cities or counties vote to raise or lower their local rates. The state rate of 6.25% has remained the same for many years, but local rates shift more often. If you move to a new city or county in Texas, check the rate for your new location — it may be different from where you came from.

The Comptroller's office publishes updates to local rates on its website. If you own a business, you should check periodically to make sure you are charging the correct rate in each location where you operate. Charging the wrong rate, even by mistake, can result in penalties and back taxes owed.

Frequently Asked Questions

Is there a state sales tax holiday in Texas?

Yes. Texas holds an annual sales tax holiday in early August, typically lasting one week. During this period, most clothing, shoes, and school supplies under certain price limits are sold without sales tax. The exact dates and item limits change each year, so check the Comptroller's website in July for the current year's details.

Do I pay sales tax on a car purchase in Texas?

Yes. When you buy a vehicle in Texas, you pay sales tax on the purchase price. The tax is calculated on the full price, though you may be able to deduct a trade-in value before tax is applied. The dealer collects the tax and reports it to the state.

What happens if a business charges the wrong sales tax rate?

If a business overcharges you, you can ask for a refund. If they undercharge, they are responsible for paying the difference to the state, not you. The Comptroller can audit businesses and assess penalties if they consistently charge incorrect rates or fail to report taxes owed.

Can I deduct sales tax I paid on my personal income tax return?

You can deduct either sales tax or state income tax on your federal return, but not both. Since Texas has no state income tax, you would deduct the sales tax you paid. Keep receipts for large purchases throughout the year if you plan to claim this deduction.

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

Most services in Texas are taxed. A haircut, car repair, plumbing service, and appliance repair all have sales tax added. However, some professional services like legal information or medical care are not taxed. When in doubt, ask the service provider whether tax will be added to your bill.