Texas Sales Tax Rate and How It Works

Texas charges a base sales tax of 6.25 percent, but most purchases are taxed at a higher rate because local taxes stack on top

The state sales tax in Texas is 6.25 percent. However, that is rarely the rate you pay at checkout. Texas allows cities and counties to add their own local sales taxes on top of the state rate, so your actual tax depends on where you make the purchase. A transaction in Austin is taxed differently than one in Houston or a small town outside Dallas.

The combined rate — state plus local — ranges from 6.25 percent to 8.25 percent across Texas. Some areas have no local tax and use only the state rate. Others layer on city tax, county tax, and sometimes special district taxes for transit or economic development. You can find your exact local rate by entering your address into the Texas Comptroller's tax rate lookup tool, or by checking your receipt from a recent purchase in that location.

Key Takeaways

• Texas state sales tax is 6.25 percent, but local taxes add on top, making your total rate between 6.25 and 8.25 percent depending on your city and county.
• The Texas Comptroller maintains a searchable database where you can enter your address and see the exact combined rate for that location.
• Most tangible goods are taxed, but groceries, prescription medications, and certain medical devices are exempt from sales tax in Texas.
• Services are generally not taxed in Texas, though some specific services like car rentals and hotel stays have their own tax rates.

How local taxes are added to the state rate

Texas divides sales tax into layers. The state collects 6.25 percent. Cities can add up to 2 percent. Counties can add up to 1 percent. Special taxing districts — created for purposes like public transportation or economic development — can add another 0.5 percent. These stack on top of each other, which is why some areas reach 8.25 percent.

A city in a county with an active special district might have a rate like this: 6.25 percent (state) + 1.25 percent (city) + 1 percent (county) + 0.5 percent (special district) = 9 percent. However, Texas law caps the total at 8.25 percent, so no location can exceed that rate. The breakdown varies by location because each city and county decides independently whether to impose a local tax and at what rate.

What is and is not taxed in Texas

Most items you buy in a store are subject to sales tax: clothing, electronics, furniture, toys, and most household goods. However, Texas exempts certain categories. Groceries — food you prepare at home — are not taxed. Prescription medications are exempt. Medical devices prescribed by a doctor, such as diabetic supplies or mobility aids, are also exempt. Prepared food from restaurants and fast-food chains is taxed.

Services are generally not taxed in Texas. A haircut, plumbing repair, or dental cleaning is not subject to sales tax. However, some services have their own specific taxes. Hotel stays are taxed at the state rate plus local taxes. Car rentals are taxed. Certain telecommunications services are taxed. The rule is not absolute, so if you are unsure whether a specific purchase or service is taxed, the receipt will show it, or you can contact the business directly.

How to find the exact tax rate for your location

The Texas Comptroller of Public Accounts maintains a Sales Tax Rate Lookup tool on its website. You enter your street address, city, and ZIP code, and the tool returns the combined state and local rate for that specific location. This is the most accurate way to know your rate before you shop, since rates can differ between neighborhoods in the same city or between a city and its surrounding unincorporated areas.

You can also look at a recent receipt from a purchase in that location. The receipt shows the tax rate applied. If you are shopping online and the seller is based in Texas or has a physical location in Texas, Texas sales tax applies to your order. If the seller is out of state and has no Texas presence, Texas tax may not explore — though this depends on the seller's business structure and recent changes to tax law.

Differences between Texas and neighboring states

Texas sales tax is lower than some neighboring states and higher than others. Louisiana has a state rate of 4.45 percent, but local taxes can push the combined rate to 11.45 percent in some areas. Oklahoma's state rate is 4.5 percent, with local taxes reaching up to 11.5 percent in some locations. New Mexico's state rate is 5.125 percent, with local taxes adding up to 8.8125 percent in some areas. Arkansas has a state rate of 6.5 percent, with combined rates reaching 11.5 percent in some locations.

If you live near a state border and make large purchases, the tax difference can matter. However, you are required to pay sales tax in the state where the purchase is made, not where you live. Buying something in Oklahoma to avoid Texas tax is not legal; you owe the Oklahoma tax at the time of purchase.

Tax rates on specific items and services

Most items follow the standard combined rate for your location. However, a few categories have different rules. Gasoline is taxed at the standard rate, but Texas also charges a separate fuel tax per gallon. Cigarettes and tobacco products are taxed at the standard rate plus an additional excise tax. Alcohol is taxed at the standard rate plus state and federal excise taxes. These additional taxes are separate from sales tax and appear as line items on receipts or pump displays.

Digital goods — software, e-books, music, and streaming subscriptions — are generally taxed in Texas if the seller has a physical presence in the state or meets certain sales thresholds. Used items sold by individuals are not taxed, but used items sold by a business are taxed. Resale items — goods a business buys to resell — are not taxed if the buyer has a resale certificate, which allows businesses to buy wholesale without paying tax and collect tax from their customers instead.

Frequently Asked Questions

What is the sales tax rate in my city?

Use the Texas Comptroller's Sales Tax Rate Lookup tool on its website. Enter your street address and ZIP code to see the exact combined state and local rate for your location. Rates vary by city and county, so entering your specific address is the only way to get an accurate answer.

Is grocery food taxed in Texas?

No. Food you buy at a grocery store to prepare at home — bread, milk, vegetables, meat, cereal — is not taxed in Texas. However, prepared food from restaurants, delis, and fast-food chains is taxed at the standard rate for your location.

Do I pay Texas sales tax on online purchases?

It depends on the seller. If the online seller has a physical location in Texas or meets certain sales thresholds, Texas sales tax applies to your order. If the seller is based out of state and has no Texas presence, Texas tax may not explore. Check the seller's tax policy or your receipt to confirm.

Why is the sales tax rate different in nearby cities?

Each city and county in Texas sets its own local tax rate independently. A city might add 1.25 percent while a neighboring city adds 0.5 percent. Special taxing districts for transit or development can add another 0.5 percent. These layers stack on the state rate, creating different totals in different locations.

Are prescription medications taxed in Texas?

No. Prescription medications are exempt from sales tax in Texas. Medical devices prescribed by a doctor, such as diabetic test strips or mobility aids, are also exempt. Over-the-counter medications and vitamins are taxed at the standard rate.