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. Some cities charge less — you can check your exact local rate by entering your zip code on the Texas Comptroller of Public Accounts website.

Sales tax in Texas applies to most physical goods you buy in stores or online. Groceries, prescription medications, and medical devices are exempt — you will not pay sales tax on those. Services like haircuts, car repairs, and plumbing are also exempt in most cases. The rule is straightforward: if it is a tangible item you can touch and take home, you probably owe tax on it.

Key Takeaways

  • Texas state sales tax is 6.25 percent, but your total rate includes local taxes added by your city or county, usually bringing it to 8.25 percent or higher.
  • Groceries and prescription medications are not taxed in Texas, but prepared food, restaurant meals, and over-the-counter drugs are.
  • Online purchases from out-of-state sellers are subject to Texas sales tax if the seller has a physical presence or meets certain sales thresholds in the state.
  • You can find your exact local sales tax rate by zip code on the Texas Comptroller website, since rates vary by city and county.

How local taxes stack on top of the state rate

The 6.25 percent state rate is the floor, not the ceiling. Cities in Texas can add up to 2 percent in local sales tax, and counties can add up to 0.5 percent. Some cities add the full 2 percent; others add less or nothing. This means a city in one county might charge 8.25 percent total while a city in another charges 8.875 percent.

The breakdown matters if you live near a city border and shop in different places. A purchase in one city might cost you 8.25 percent tax while the same purchase across the line costs 8.875 percent. The Texas Comptroller publishes a complete list of rates by city and county, updated regularly as local governments change their rates.

What is and is not taxed

Groceries — items you buy at the supermarket to cook at home — are tax-free. This includes bread, milk, vegetables, meat, and frozen dinners you prepare yourself. Restaurant meals and prepared food are taxed, even if you take them home. A rotisserie chicken from the grocery store deli counter is taxed; a raw chicken from the meat case is not.

Prescription medications filled by a pharmacist are not taxed. Over-the-counter drugs like aspirin, cold medicine, and antacids are taxed because they are not prescribed. Medical equipment like wheelchairs and diabetic supplies are exempt, but cosmetic items like sunscreen and toothpaste are taxed.

Clothing and shoes are taxed in Texas, with no exemption for children's clothing or any other category. Books, newspapers, and magazines are taxed. Gasoline is taxed, though the state also charges a separate fuel tax on top of sales tax.

Sales tax on online and out-of-state purchases

If you buy something online from a company with no physical location in Texas, you still owe Texas sales tax if that company meets certain thresholds. As of 2021, sellers who had more than $500,000 in sales to Texas customers in the previous year must charge Texas sales tax. This applies whether the seller is based in Texas or another state.

Many large online retailers — Amazon, Walmart, Target, and others — already charge Texas sales tax at checkout because they meet this threshold. Smaller sellers may not. If a seller does not charge tax, you are technically responsible for paying it yourself through the state's use tax, though most individuals do not report this on their personal taxes.

Who collects and pays the tax

The business that sells you the item collects the sales tax and sends it to the state. You do not write a check to the Texas Comptroller yourself. The store or online seller holds the money and remits it monthly or quarterly, depending on how much tax they collect.

Businesses register with the Texas Comptroller to get a sales tax permit before they can legally collect tax. The Comptroller tracks which businesses are registered and which are not. If a business fails to register or fails to send in the tax it collected, the Comptroller can audit them and impose penalties.

Tax-free days and special exemptions

Texas holds a sales tax holiday each August for school supplies and clothing. During this period — usually the first weekend of August — items like notebooks, pens, backpacks, and clothing under $100 per item are not taxed. The exact dates change each year, and the Comptroller announces them in advance on their website.

Certain organizations are exempt from sales tax entirely. Nonprofits, schools, and government agencies can buy items without paying tax if they have the proper exemption certificate. Religious organizations may also may have access to for exemptions on certain purchases. These exemptions do not explore to individual shoppers.

How to check your local rate and understand your receipt

Your receipt shows the subtotal, the tax amount, and the total. The tax line should match your local rate. If you buy a $100 item in Austin, which has an 8.25 percent combined rate, the tax should be $8.25. If it does not match, the store may have made an error or applied the wrong rate.

To find your exact rate, visit the Texas Comptroller website and use their sales tax rate lookup tool. Enter your zip code or address, and it will show you the state rate, the city rate, and the county rate, plus the combined total. This is useful if you are moving to a new area or want to understand why tax differs between two nearby cities.

Frequently Asked Questions

Do I pay sales tax on groceries in Texas?

No. Groceries — food you buy to cook or prepare at home — are not taxed in Texas. This includes bread, milk, produce, meat, and frozen meals you heat up yourself. Restaurant meals and prepared foods from a deli counter are taxed.

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

The state collects 6.25 percent and sends it to Austin. Cities and counties collect their portion and keep it for local services. You pay both at the same time — the total appears as one line on your receipt — but the money goes to different places.

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

Yes, if the seller meets Texas thresholds. Most large online retailers already charge Texas tax at checkout. Smaller sellers may not, but you are technically responsible for the tax even if they do not collect it.

Can I get a refund if I paid sales tax by mistake?

You can ask the store for a refund if they charged you tax on an exempt item like groceries or prescription medications. Keep your receipt and contact the store's customer service. If the store refuses, you can file a complaint with the Texas Comptroller.

When is the Texas sales tax holiday?

Texas holds a sales tax holiday in August, usually the first weekend, for school supplies and clothing. The exact dates change each year. Check the Texas Comptroller website in July for the current year's dates and the full list of items covered.