Texas Sales Tax Rate and What It Covers

Texas has a state sales tax of 6.25 percent, which applies to most goods you buy in stores. This is the baseline rate that every retailer in the state must collect. However, your actual tax at checkout is usually higher because cities and counties add their own local sales taxes on top of the state rate.

The combined rate you pay depends on where you shop. In Houston, for example, the total is 8.25 percent. In Dallas, it's 8.25 percent. In Austin, it's 8.25 percent. In San Antonio, it's 8.125 percent. These combined rates vary across Texas counties and cities, so the same item costs different amounts in tax depending on your location. You can find your exact local rate by entering your zip code on the Texas Comptroller of Public Accounts website.

Sales tax applies to clothing, electronics, furniture, groceries (with some exceptions), and most other retail purchases. It does not explore to prescription medications or certain medical devices. Services like haircuts, car repairs, and plumbing are generally not taxed, though labor charges bundled with taxable goods sometimes are.

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 6.25 percent to over 8 percent depending on where you live.
  • Sales tax applies to most goods but not to prescription medications, most services, or certain groceries.
  • The Texas Comptroller of Public Accounts website lets you look up the exact tax rate for your location.
  • Online purchases are taxed the same way as in-store purchases if the seller has a physical presence in Texas.

How Local Taxes Add to the State Rate

Every Texas city and county can set its own local sales tax rate on top of the state's 6.25 percent. Cities typically add between 1 and 2 percent, and counties add between 0.25 and 2 percent. Some areas stack both a city and county tax, which is why you see rates above 8 percent in many parts of the state.

The money from local sales taxes goes to city and county budgets for schools, roads, public safety, and other services. When you buy something, the retailer collects all the tax—state and local combined—and sends it to the appropriate government offices. You don't pay the state and local taxes separately; they're combined into one number on your receipt.

A few Texas cities have no local sales tax at all, meaning you pay only the 6.25 percent state rate. These are rare, but they exist in small towns. If you live near the border between two tax jurisdictions, the rate where you make the purchase is what applies, not where you live.

What Is and Isn't Taxed in Texas

Most items you buy in stores are subject to sales tax: clothing, shoes, electronics, furniture, toys, books, and household goods. Groceries are taxed, but only certain items. Fresh produce, meat, dairy, and bread are not taxed. Pre-packaged snacks, candy, soft drinks, and prepared foods are taxed. The line between "food" and "taxable snacks" can be confusing—a bag of raw carrots is not taxed, but a bag of carrot chips is.

Services are generally not taxed in Texas. When you pay a plumber, electrician, or mechanic for labor, that charge has no sales tax. However, if you buy parts or materials at the same time, those are taxed. A haircut is not taxed, but if the salon sells you shampoo, that is. Prescription medications are never taxed. Over-the-counter medicines and vitamins are taxed like any other retail item.

Digital goods—ebooks, software, streaming subscriptions, and digital downloads—are taxed in Texas. A physical book is taxed, and so is an ebook. This applies whether you buy from a Texas retailer or an out-of-state one, as long as the seller collects Texas tax.

Sales Tax on Online and Out-of-State Purchases

If you order something online from a retailer that has a warehouse, office, or other physical presence in Texas, Texas sales tax applies. This includes major retailers like Amazon, Walmart, and Target, which all have operations in the state. The tax is calculated based on the address where the item is being shipped.

If you order from a small out-of-state retailer with no Texas presence, Texas sales tax may not be collected at checkout. However, Texas law requires you to pay "use tax" on those purchases when you file your state tax return. Use tax is the same rate as sales tax and covers items you bought outside Texas but use inside it. Most people do not report use tax, but it is technically owed.

The rules around online sales tax have changed significantly in recent years. As of 2021, most online retailers are required to collect and send Texas sales tax, even if they have no physical location in the state. If you see no tax charged on an online purchase shipped to Texas, contact the retailer—they may have made a mistake.

Who Collects and Where the Money Goes

Retailers collect sales tax at the point of sale and hold it temporarily. They then send the collected tax to the Texas Comptroller of Public Accounts, which is the state agency that oversees tax collection. The Comptroller distributes the money to the state general fund and to local governments based on where the tax was collected.

State sales tax revenue goes into the state budget to fund schools, highways, and other state services. Local sales tax revenue goes directly to the city or county where the purchase was made. A purchase in Austin sends local tax money to Austin's city budget. A purchase in a county unincorporated area sends it to the county budget. This is why cities and counties have an incentive to attract retail businesses—sales tax is a major source of local revenue.

Retailers are required to keep records of all sales tax collected and file reports with the Comptroller. Most file monthly, though some file quarterly or annually depending on their volume. If a retailer fails to send in the tax they collected, the Comptroller can audit them and impose penalties.

Special Sales Tax Situations and Exemptions

Certain organizations and purchases are exempt from sales tax in Texas. Non-profit organizations, religious institutions, and government agencies do not pay sales tax on purchases made for their operations. If you work for a non-profit and buy office supplies on behalf of the organization, no tax is charged if you provide the seller with the organization's tax exemption certificate.

Resellers—people who buy items to resell them—do not pay sales tax on their wholesale purchases. A retail store buying inventory from a distributor does not pay sales tax because the tax will be collected when the customer buys the item. The reseller provides a resale certificate to the wholesaler to prove they are buying for resale.

Agricultural equipment and certain farm supplies have reduced or no sales tax in Texas. A farmer buying a tractor or irrigation equipment may may have access to for exemptions. Machinery used in manufacturing also has special tax treatment. These exemptions are designed to reduce the tax burden on industries important to the state economy.

How to Find Your Local Sales Tax Rate

The easiest way to find your exact sales tax rate is to visit the Texas Comptroller of Public Accounts website and use their sales tax rate lookup tool. Enter your zip code, and the tool shows you the combined state and local rate for that area. You can also search by city or county name.

If you're shopping in a different city or county than where you live, the rate at that location applies, not your home rate. If you buy something in a neighboring county with a lower rate, you pay that lower rate. Retailers' point-of-sale systems are programmed to calculate the correct rate based on the store's location, so you don't have to calculate it yourself.

Your receipt always shows the sales tax amount and the rate applied. If you think the tax is wrong, check it against your local rate using the Comptroller's tool. Errors are rare, but they happen. If you find a mistake, contact the retailer and ask them to correct it.

Frequently Asked Questions

Does Texas have sales tax on groceries?

Some groceries are taxed and some are not. Fresh produce, meat, dairy, and bread are not taxed. Pre-packaged snacks, candy, soft drinks, and prepared foods are taxed. The distinction is whether the item is considered a basic food staple or a prepared or processed snack.

What's the difference between sales tax and use tax?

Sales tax is collected by the retailer when you buy something. Use tax is a tax you owe on items you bought outside Texas but use inside it. They are the same rate. Most people do not report use tax, but it is technically required when you file your state return.

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

No. Labor and services are not taxed in Texas. You do not pay sales tax on a haircut, plumbing repair, or mechanic's labor. However, if you buy products at the same time—shampoo at a salon, parts at a repair shop—those products are taxed.

Why is my sales tax rate different from the state rate of 6.25 percent?

Your city and county add local sales taxes on top of the state rate. These local rates vary by location and can range from 0.25 to 2 percent or more. The combined rate is what you pay at checkout. Use the Texas Comptroller's lookup tool to find your exact local rate.

Do I have to pay sales tax on online purchases?

Yes, if the retailer has a physical presence in Texas or is required to collect Texas tax. Most major online retailers collect and send Texas sales tax. If no tax was charged, contact the retailer—they may have made an error or may not be collecting tax legally.