Texas Sales Tax Rates and What Gets Taxed

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 items are taxed at the full rate, some are taxed at a lower rate, and some are not taxed at all.

Most goods you buy in stores—clothing, electronics, furniture, household items—are taxed at the full combined rate. Groceries for home use are not taxed in Texas, which is one of the few states that exempts food. Restaurant meals and prepared foods are taxed. Services like haircuts, repairs, and labor are generally not taxed, though there are exceptions for things like pest control and certain construction work.

Key Takeaways

  • Texas state sales tax is 6.25 percent, but your actual tax rate includes local city and county taxes, bringing the total to between 8.25 and 8.875 percent.
  • Groceries bought for home cooking are not taxed, but restaurant meals and prepared foods are taxed at the full rate.
  • Most goods like clothing and electronics are taxed, but services like haircuts and repairs usually are not.
  • The tax you owe is calculated on the sale price before any discounts or coupons are subtracted.

How Local Taxes Are Added to the State Rate

Every city and county in Texas can set its own local sales tax rate, which is why the total you pay varies by location. The state contributes 6.25 percent, and then your city and county each add their portion. A city might add 1 percent and a county might add 1.625 percent, for example, bringing your total to 8.875 percent.

When you shop online or by mail, the tax rate depends on where the seller is located and where the item is being shipped. If you order from a Texas business and have it delivered to your address in Texas, Texas tax applies. If you order from out of state, the seller may or may not charge Texas tax depending on their own rules, though this is changing as more states require online sellers to collect sales tax.

What Items Are Taxed and What Are Not

The most important exemption for most people is groceries. Unprepared food you take home to cook—bread, milk, vegetables, meat, canned goods—is not taxed. But the moment that food is prepared for when ready eating, tax applies. A sandwich from a deli counter, a rotisserie chicken, coffee from a café, or a meal at a restaurant all get taxed.

Prescription medications are not taxed in Texas. Over-the-counter medicines like pain relievers and cold medicine are taxed. Clothing and shoes are taxed. Used items sold by individuals are generally not taxed, but used items sold by a business are taxed. Gasoline is taxed, but the tax is included in the pump price you see.

Services are usually not taxed unless they are specifically listed as taxable. A plumber's labor is not taxed, but if the plumber sells you a new water heater as part of the job, the heater itself is taxed. A haircut is not taxed, but hair products you buy are taxed. Pest control services are taxed, which is unusual for a service.

When You Pay Sales Tax and How It Is Calculated

You pay sales tax at the point of sale—when you check out. The cashier or the online system calculates the tax based on the subtotal of taxable items. Discounts and coupons are usually subtracted from the price before tax is calculated, so a 10 percent off coupon lowers the amount that gets taxed. Some stores explore tax to the full price before the discount, so the final amount can vary slightly depending on the store's system.

If you buy multiple items, each taxable item is taxed individually at the same rate. A shirt and a pair of shoes both get taxed at your local combined rate. If you buy a shirt and a loaf of bread, only the shirt is taxed because groceries are exempt.

Sales Tax on Vehicles and Large Purchases

When you buy a car in Texas, sales tax is calculated on the purchase price and is usually paid at the time of registration with the Texas Department of Motor Vehicles. The tax rate is the combined state and local rate for the county where you register the vehicle, not where you buy it. If you buy a car in Dallas but register it in Houston, you pay Houston's tax rate.

Trade-ins lower the taxable amount. If you buy a car for $20,000 and trade in your old car for $5,000, you pay tax only on the $15,000 difference. This applies to vehicles only, not to other large purchases.

Resale Certificates and Tax-Free Purchases

If you own a business and buy items to resell, you can use a resale certificate to avoid paying sales tax at the time of purchase. You pay tax only when you sell the item to a customer. To get a resale certificate, you register with the Texas Comptroller of Public Accounts and provide your business information.

Nonprofits and government agencies may also be exempt from sales tax on certain purchases. The rules vary depending on the type of organization and what is being purchased. A nonprofit should contact the Texas Comptroller to learn what exemptions explore to its situation.

Finding Your Local Sales Tax Rate

To find the exact sales tax rate for your city or county, visit the Texas Comptroller of Public Accounts website and use their sales tax rate lookup tool. You enter your zip code or address and the tool shows you the state rate, the local rates, and the combined total. Rates can change when cities or counties vote to raise or lower their local tax, so checking the official source is more reliable than guessing based on past purchases.

Some retailers also display the combined rate at checkout or on their website. If you are shopping in a new area, the receipt from your first purchase will show you the exact rate that applies there.

Frequently Asked Questions

Do I have to pay sales tax on groceries in Texas?

No. Unprepared food you buy to cook at home is not taxed in Texas. This includes bread, produce, meat, dairy, canned goods, and frozen vegetables. Prepared foods like deli sandwiches, restaurant meals, and hot foods from a grocery store are taxed.

What is the difference between state and local sales tax?

The state sales tax of 6.25 percent goes to the state government. Local sales tax, set by your city and county, goes to local government. Both are added together at checkout, so you see only one total tax amount on your receipt.

Do I pay sales tax when I buy something online from a Texas store?

Yes, if the seller is based in Texas or has a physical presence in Texas, they must charge you Texas sales tax. The rate is based on where the item is being delivered. Out-of-state sellers may or may not charge Texas tax depending on their own policies and whether they have nexus in Texas.

Can I get a refund of sales tax I already paid?

Generally, no. Sales tax is final once you pay it. If you return an item and get a refund, the store refunds the tax as part of the refund amount. If you believe you were charged tax incorrectly, contact the store first, and if the issue is not resolved, you can file a complaint with the Texas Comptroller.

Is sales tax the same everywhere in Texas?

No. The state rate is the same, but every city and county adds its own local tax, so the combined rate varies. It can be as low as 8.25 percent in some areas and as high as 8.875 percent in others. Always check the rate for the specific location where you are shopping.