Most groceries in Texas are not taxed, but prepared foods and some items are

Texas does not charge sales tax on most food you buy at a grocery store to cook at home. This includes raw meat, produce, bread, milk, eggs, and canned goods. However, Texas does tax prepared foods — anything meant to be eaten right away rather than cooked later — and certain other items you might find in a grocery store.

The rule is straightforward: if the food requires further preparation before you eat it, it is usually not taxed. If it is ready to eat or heated for serving, it is taxed at the standard Texas sales tax rate, which varies by location but is at least 8.25 percent.

Key Takeaways

  • Raw groceries like meat, produce, dairy, and bread are not taxed in Texas, even if you buy them at a store that also sells prepared foods.
  • Prepared foods — deli items, hot foods, bakery items sold warm, and anything meant to be eaten when ready — are taxed at your local sales tax rate.
  • Some items that look like groceries, such as candy, soft drinks, and energy drinks, are taxed because they are not considered essential food.
  • The same item can be taxed or untaxed depending on how it is sold: a rotisserie chicken is taxed, but raw chicken is not.
  • Your city and county may add local sales tax on top of the state rate, so the total tax you pay depends on where you shop.

What grocery items are not taxed

Texas exempts most food intended for home preparation from sales tax. This includes all raw meat and poultry, fresh and frozen vegetables, fresh and frozen fruit, eggs, milk and dairy products, bread and flour, rice and grains, canned vegetables and fruits, dried beans and legumes, nuts in the shell, peanut butter, and cooking oils. Infant formula and baby food are also not taxed.

The tax-free list extends to items you might not think of as groceries but are still considered food for home preparation: flour, sugar, salt, spices, yeast, baking powder, and vinegar. Frozen uncooked meals — such as frozen lasagna or frozen burritos that you heat at home — are not taxed. The key is that you are expected to do something to the food before eating it.

What foods and drinks are taxed in Texas

Prepared foods are taxed. This includes deli meat sliced at the counter, rotisserie chicken, hot pizza, sandwiches made to order, fried chicken, and anything from a hot food bar. Bakery items sold warm or still hot from the oven are taxed. Cold bakery items — a loaf of bread from the shelf — are not, but a warm croissant or a slice of cake from the bakery case is.

Drinks are taxed unless they are milk. Soft drinks, energy drinks, sports drinks, coffee, tea, juice, and bottled water are all taxed. Alcohol is taxed at a higher rate than food. Candy is taxed because it is not classified as essential food in Texas. Snack foods like chips, crackers, and cookies are not taxed, but candy is.

Restaurant meals and takeout are taxed. If you order food to eat at a restaurant, take it home, or have it delivered, the entire purchase is subject to sales tax. This applies whether you eat in the restaurant or take the food with you.

How to tell if something will be taxed at checkout

The simplest rule: if you have to cook it, heat it, or prepare it before eating, it is probably not taxed. If it is ready to eat or the store heated it for you, it is taxed. When you are unsure, ask the cashier before you pay. They can tell you whether an item rings up with tax.

Some items are ambiguous. A rotisserie chicken sitting under heat lamps is taxed because it is hot and ready to eat. A raw chicken in the meat case is not. A slice of pizza from a hot case is taxed; frozen pizza you take home to bake is not. A bakery cookie still warm from the oven is taxed; a packaged cookie from the shelf is not.

If you buy multiple items together — say, a rotisserie chicken and a head of lettuce — the chicken is taxed and the lettuce is not. The cashier will ring them separately or note which items are taxable.

Local sales tax rates vary by city and county

Texas has a state sales tax of 6.25 percent, but cities and counties can add their own local sales tax on top of that. The total rate you pay depends on where you shop. In some areas, the combined rate is 8.25 percent. In others, it can be as high as 8.875 percent or higher. A few areas have lower combined rates.

You can find your local sales tax rate by entering your zip code on the Texas Comptroller of Public Accounts website or by asking a cashier. The rate applies to all taxable items, including prepared foods, drinks, and candy, but not to groceries meant for home preparation.

Special cases: what counts as prepared food

Some items blur the line between grocery and prepared food. Deli salads — potato salad, coleslaw, or chicken salad — are taxed because they are ready to eat. A bag of potatoes is not. A rotisserie chicken is taxed; a raw chicken is not. A hot sandwich from the deli counter is taxed; bread and deli meat you buy separately are not.

Bakery items are taxed if they are sold warm or heated. A warm donut from the bakery case is taxed. A packaged donut from the shelf is not. A warm cinnamon roll is taxed; a cold one from a package is not. The temperature and whether the store heated it matter.

Soup and broth sold hot are taxed. Canned soup you heat at home is not. Deli platters and party trays are taxed. Individual ingredients you buy to make your own platter are not.

Frequently Asked Questions

Is coffee taxed in Texas?

Yes. Coffee, whether hot or cold, is taxed at your local sales tax rate. This applies to coffee you buy at a grocery store, a coffee shop, or a restaurant. The only beverage that is not taxed is milk.

Are frozen meals taxed?

Frozen meals you heat at home — such as frozen lasagna, frozen burritos, or frozen TV dinners — are not taxed. They are considered food for home preparation. However, if you buy a hot meal from a restaurant or deli that happens to be frozen, it is taxed.

Is pizza from a grocery store bakery taxed?

If the pizza is hot or warm when you buy it, it is taxed. If it is cold and packaged, it is not. Ask the cashier if you are unsure whether the item was heated for sale.

What about vitamins and supplements?

Vitamins, supplements, and over-the-counter medicines are not food and are not covered by the grocery exemption. They are taxed at your local sales tax rate.

Can I return a taxed item and get the tax back?

No. Once you have paid sales tax on an item, the tax is not refunded if you return the item. You receive a refund of the purchase price, but the tax paid is kept by the state and local government.