Texas charges a statewide sales tax of 6.25 percent on most goods and some services

Texas has a 6.25 percent state sales tax that applies to retail purchases of tangible goods — things you can touch and take home. This rate is fixed by state law and does not change based on where in Texas you shop. However, your actual total sales tax is usually higher because cities and counties add their own local taxes on top of the state rate.

When you buy something at a store, the cashier or checkout screen shows you the combined rate. That combined rate includes the 6.25 percent state tax plus whatever local taxes your city and county have imposed. Local rates vary widely across Texas, so a purchase in Houston will have a different total tax than the same purchase in Dallas or Austin.

Sales tax applies at the point of sale — when you hand over money or complete a transaction. The seller collects the tax from you and then sends it to the state and local tax authorities. You do not file sales tax yourself as a consumer; the business handles the collection and remittance.

Key Takeaways

  • Texas state sales tax is 6.25 percent on most goods, but your total tax rate includes local city and county taxes added on top.
  • Local sales tax rates range from 0.125 percent to 2 percent depending on your city and county, making combined rates vary from 6.25 percent to over 8 percent.
  • Sales tax applies to tangible goods and certain services like hotel stays, but not to groceries, prescription medications, or most professional services.
  • Businesses collect and remit sales tax; as a consumer you pay it at checkout but do not file it yourself.
  • Online purchases from out-of-state sellers may not have Texas sales tax collected at checkout, but you may owe use tax when you file your state return.

What the combined state and local rate looks like across Texas

Your actual sales tax rate depends on where you live or shop. The state contributes 6.25 percent, but cities and counties stack their own rates on top. A city might add 1 percent, and a county might add 0.5 percent, bringing your total to 7.75 percent.

The lowest combined rates in Texas are in areas with no local additions — just the 6.25 percent state rate. The highest combined rates reach 8.25 percent or slightly above in some urban areas where multiple local jurisdictions have added taxes. To find your exact rate, you can enter your address on the Texas Comptroller of Public Accounts website or ask a local business.

The rate you pay is determined by where the sale takes place, not where you live. If you drive to another city to shop, you pay that city's combined rate at checkout.

Which purchases are taxed and which are not

Sales tax applies to most tangible goods — clothing, electronics, furniture, tools, and similar items. It also applies to certain services: hotel and motel stays, car rentals, and some repair services are taxed in Texas.

Several categories are exempt from sales tax. Groceries and food bought for home consumption are not taxed. Prescription medications are exempt. Most professional services — haircuts, legal information, accounting, medical services — are not subject to sales tax. Agricultural equipment used in farming may be exempt depending on the specific item and use.

Clothing and shoes are taxed at the full rate with no special exemption in Texas, unlike some other states. Children's clothing is not treated differently from adult clothing.

How sales tax works for online and out-of-state purchases

When you order from an out-of-state online retailer, Texas sales tax may not be collected at checkout. Whether it is collected depends on whether that retailer has a physical presence or significant sales activity in Texas. Large retailers like Amazon typically collect Texas sales tax on orders shipped to Texas addresses. Smaller retailers may not.

If sales tax was not collected when you made the purchase, you may owe use tax on that item. Use tax is Texas's way of collecting tax on purchases that escaped sales tax. The rate is the same as your local sales tax rate. You report use tax on your Texas state income tax return, though most individual taxpayers do not owe it because the amounts are small.

The responsibility to track and report use tax falls on the buyer, not the seller. In practice, few individual consumers report it, but the obligation exists under Texas law.

Who collects sales tax and where the money goes

Businesses that make retail sales are responsible for collecting sales tax from customers and remitting it to the state. The business acts as a collector on behalf of the government — the tax is not the business's money to keep.

The Texas Comptroller of Public Accounts oversees sales tax collection and enforcement. Businesses file sales tax returns monthly, quarterly, or annually depending on their sales volume. The state then distributes the revenue to local governments, schools, and state programs according to formulas set by law.

If you are a business owner, you need a sales tax permit from the Comptroller before you can legally collect sales tax. Consumers do not need any permit or registration; you straightforward pay the tax at checkout.

Sales tax on specific situations you might encounter

Restaurant meals and prepared food: Prepared food and restaurant meals are taxed at the full rate. This includes takeout, delivery, and dine-in. Groceries you buy raw and cook at home are not taxed.

Motor vehicles: Cars, trucks, and motorcycles are subject to sales tax when purchased. The tax is calculated on the purchase price and collected at the dealership or private sale point.

Gasoline: Gasoline and diesel fuel are subject to sales tax in addition to state and federal fuel excise taxes. The sales tax is included in the price you see at the pump.

Shipping and delivery: Shipping charges are generally taxed if they are separately stated and the item being shipped is taxable. If shipping is bundled into the price, it is taxed as part of the sale.

Frequently Asked Questions

What is the difference between sales tax and use tax?

Sales tax is collected by the seller at the point of sale. Use tax is a tax you owe on purchases where sales tax was not collected — typically out-of-state or online purchases. Both rates are the same; use tax is just the mechanism for taxing purchases that bypass the normal sales tax collection process.

Do I have to pay sales tax on items I buy outside Texas and bring home?

Technically, you owe use tax on those items when you bring them into Texas, but enforcement is minimal for individual consumers. The obligation exists, but most people do not report it unless the purchase is very large or for business purposes.

Is sales tax charged on services like haircuts or doctor visits?

Most professional services are not subject to sales tax in Texas. Haircuts, medical care, legal information, and accounting services are generally exempt. However, some services like car repairs and appliance repairs may be taxed depending on the circumstances.

Why does my sales tax rate change depending on where I shop?

The state rate is always 6.25 percent, but cities and counties add their own local taxes on top. Each city and county sets its own rate, so the combined total varies by location. Your rate is determined by where the sale physically takes place.

Can businesses refuse to collect sales tax?

No. Any business making taxable sales in Texas is required by law to collect and remit sales tax. If a business does not collect it, they are breaking the law and may face penalties from the Comptroller.