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

The Texas state sales tax rate is 6.25%. However, most Texas cities and counties add their own local sales tax on top of this, so the rate you actually pay ranges from 6.25% to 8.25% depending on where you shop. Your receipt shows the combined rate for your location.

Local taxing districts — cities, counties, transit authorities, and special districts — can each add up to 2% in tax. A single purchase might be subject to the state rate plus city tax plus county tax plus a regional transit tax, all stacked together. This is why the same item costs different tax amounts in Dallas versus Houston versus a small town outside Austin.

Texas does not allow individual cities to set their own rates freely. Each local addition must be approved by voters in that area through a referendum. Once approved, the rate stays in place until voters change it again.

Key Takeaways

  • Texas state sales tax is 6.25%, but your actual rate is higher because cities and counties add local tax on top of it.
  • The combined rate you pay ranges from 6.25% to 8.25% depending on your city and county.
  • You can find your exact local rate on your sales receipt or by entering your zip code into the Texas Comptroller's tax rate lookup tool.
  • Groceries, prescription medications, and certain medical devices are exempt from sales tax in Texas.
  • Services like haircuts, repairs, and consulting are generally not subject to sales tax unless they involve a taxable product.

How to find your exact local sales tax rate

The easiest way to find your rate is to look at a recent receipt from any store in your area. The tax rate is printed on it. If you do not have a receipt, the Texas Comptroller of Public Accounts maintains a free online tax rate lookup tool on its website. Enter your zip code or street address, and it shows you the state rate, all local rates that explore to your location, and the combined total.

Rates change when voters approve new local taxes or when existing taxes expire. If you are budgeting for a business or calculating tax for a large purchase, check the Comptroller's tool rather than relying on a rate you saw months ago.

What is and is not taxed in Texas

Sales tax in Texas applies to tangible goods — items you can touch and take home. Clothing, electronics, furniture, and groceries all have sales tax added at checkout, with specific exceptions listed below.

Exempt from sales tax: Groceries (unprepared food), prescription medications, insulin, certain medical devices like glucose monitors and lancets, and prosthetic devices. Prepared food — restaurant meals, hot deli items, and food from a food truck — is taxed.

Services are generally not taxed: A haircut, car repair, plumbing work, or accounting consultation is not subject to sales tax. However, if the service includes a taxable product (like parts for a repair), tax applies to the product portion only, not the labor.

Clothing is taxed in Texas, including shoes, hats, and accessories. There is no clothing exemption or back-to-school tax holiday in Texas, unlike some other states.

Sales tax on online and out-of-state purchases

If you buy from an online retailer or out-of-state seller, Texas sales tax applies if the seller has a physical presence in Texas (a warehouse, office, or store location). Most large online retailers — Amazon, Walmart, Target — collect Texas tax on orders shipped to Texas addresses.

If a seller does not collect Texas tax at checkout, you may owe use tax on the purchase. Use tax is the same rate as sales tax and is meant to level the playing field between local and remote sellers. Most individual buyers do not report use tax, but it is technically owed. Businesses are more likely to be audited on use tax obligations.

Who collects and where the money goes

The retailer — the store or online seller — collects sales tax from you at the point of sale and sends it to the Texas Comptroller of Public Accounts. The Comptroller then distributes the money to the state and to the local taxing districts that generated it.

State sales tax revenue funds general state operations. Local tax revenue stays in the city or county that collected it and typically funds schools, public transportation, infrastructure, or other local services. The breakdown depends on what voters approved when they authorized the local tax.

Sales tax on vehicles and large purchases

Motor vehicles are subject to sales tax in Texas. When you buy a car, truck, or motorcycle from a dealer, tax is calculated on the purchase price and collected at the time of sale. If you buy a vehicle from a private seller, you owe tax when you register it with the Texas Department of Motor Vehicles.

The same applies to boats, aircraft, and other vehicles. The tax rate is your local combined rate, not a special vehicle rate.

Resale certificates and business purchases

If you are a business buying inventory or materials to resell, you can provide a resale certificate to avoid paying sales tax at purchase. The certificate tells the seller that you will collect tax when you sell the item to the end customer. You must register with the Texas Comptroller to obtain a resale certificate.

If you are a sole proprietor or small business owner and you are unsure whether you need a resale certificate, contact the Comptroller's office or a tax professional. Using a resale certificate when you are not may have access to to one, or failing to use one when you should, can result in back taxes and penalties.

Frequently Asked Questions

Does Texas have a sales tax holiday?

Texas does not have a statewide sales tax holiday for back-to-school or any other annual event. Some individual cities or counties may run limited local holidays, but these are rare and not may provide year to year. Check with your local city or county government if you think one might be happening.

What is the difference between sales tax and use tax?

Sales tax is collected by the seller when you buy something. Use tax is what you owe on purchases where sales tax was not collected — typically out-of-state or online purchases. The rate is the same; use tax just shifts the responsibility to the buyer instead of the seller.

Do I pay sales tax on a car trade-in?

No. When you trade in a vehicle toward the purchase of another vehicle, sales tax applies only to the difference between the new vehicle's price and the trade-in value. If you buy a car for $20,000 and trade in a car worth $5,000, you pay tax on $15,000, not the full $20,000.

Are services like haircuts and repairs taxed in Texas?

No, services alone are not taxed. A haircut, car repair, or plumbing visit is not subject to sales tax. If the service includes a tangible product — like parts in a repair — tax applies to the product cost only, not the labor.

How do I find the sales tax rate for a specific address?

Use the Texas Comptroller of Public Accounts tax rate lookup tool on its website. Enter your zip code or full street address, and it shows your state rate, all local rates, and the combined total. Rates are updated regularly as voters approve or expire local taxes.