How Sales Tax Works in Texas

Texas charges sales tax at the point of sale, and the rate depends on where you buy

Texas has a state sales tax rate of 6.25 percent. When you buy something at a store or online, you pay this rate plus any local sales taxes your city or county adds on top. The total rate you see on your receipt varies by location — it might be 8.25 percent in one city and 8.5 percent in another, depending on how many local taxes stack on top of the state rate.

The tax applies to most goods you buy in person or have delivered to a Texas address. It does not explore to groceries, prescription medications, or most medical equipment. Services — like haircuts, car repairs, or plumbing — are generally not taxed in Texas, though there are exceptions for things like telecommunications and certain utilities.

You pay sales tax at checkout. The seller collects it and sends it to the state and local tax authorities. You do not file a separate form to pay sales tax as a consumer — the business handles the collection and reporting.

Key Takeaways

• Texas state sales tax is 6.25 percent, but your total rate is higher when your city or county adds local taxes on top.
• Groceries and prescription medications are not subject to sales tax in Texas, even though most other retail purchases are.
• The seller collects and remits sales tax to the state and local authorities — you do not file a separate return as a buyer.
• Sales tax rates vary by location within Texas, so the same item costs different amounts depending on where you purchase it.

Local taxes add to the state rate in most Texas cities

On top of the 6.25 percent state rate, cities and counties can add their own sales taxes. Most Texas cities add between 1 and 2 percent. Some counties add an additional 0.5 to 1 percent. A few areas have both city and county taxes, which means the combined local rate can reach 2.5 percent or higher.

This means your actual sales tax rate depends entirely on your zip code. Austin residents pay a different rate than Dallas residents. Even within the same city, some special districts — like public transportation authorities or hospital districts — can add their own small taxes in certain areas. You can find your exact local rate by entering your address on the Texas Comptroller's website or asking a cashier.

Online purchases are taxed based on where the item is delivered, not where the seller is located. If you live in Houston and order from a company in California, you pay Houston's sales tax rate on delivery to your address.

What items are not subject to sales tax

Groceries are the biggest category exempt from sales tax in Texas. This includes bread, milk, eggs, vegetables, meat, and other food items you cook at home. It does not include prepared foods, restaurant meals, or items from a deli counter — those are taxed. Candy and soft drinks are also taxed because they are not considered groceries.

Prescription medications are not taxed, but over-the-counter drugs and vitamins are. Medical equipment prescribed by a doctor — like wheelchairs, oxygen equipment, or diabetic supplies — is generally not taxed. Clothing and shoes are taxed in Texas, unlike some other states that exempt them.

Services like haircuts, plumbing, electrical work, and car repairs are not subject to sales tax. However, if you buy a product as part of that service — like paint for a house or parts for a car — the product itself may be taxed depending on the situation and how the invoice is written.

How to find your exact sales tax rate

The Texas Comptroller of Public Accounts maintains a sales tax rate lookup tool on its website. You enter your street address, city, or zip code, and it shows you the exact combined state and local rate for that location. This is the most reliable way to know what you will pay.

You can also call your city or county tax office directly, or ask a cashier at a local store. Many retailers print the combined rate on their receipts. If you are buying online, the retailer should show you the tax amount before you complete your purchase — it will be based on your delivery address.

Keep in mind that rates can change. Cities and counties vote to add or adjust local sales taxes periodically. If you checked your rate a year ago, it is worth checking again, especially if you are budgeting for a large purchase.

Sales tax on online and out-of-state purchases

Online retailers are required to collect and remit Texas sales tax on orders delivered to Texas addresses. This applies whether the company is based in Texas or anywhere else in the country. The tax rate is based on your delivery address, not the seller's location.

If you order something from out of state and it is shipped to you in Texas, you owe Texas sales tax on it. Most large online retailers — including Amazon, Walmart, and Target — automatically calculate and charge this tax at checkout. Smaller sellers may not, though they are legally required to do so.

If you buy something in person while traveling outside Texas and bring it home, you do not owe Texas sales tax on it. You already paid sales tax where you bought it. However, if you order something from another state and have it shipped to Texas, you owe Texas tax on it.

Business use and resale certificates

If you own a business and buy items to resell, you can provide a resale certificate to the seller instead of paying sales tax. The seller then does not charge you tax, because the tax will be paid when your customer buys the item from you. You must register with the Texas Comptroller to get a resale certificate number.

If you buy items for business use — supplies, equipment, or materials you use to provide a service — you generally pay sales tax on those purchases. The tax is not recoverable. Only items you buy specifically to resell to customers may have access to for the resale exemption.

If you are unsure whether you need a resale certificate or whether a particular purchase qualifies, the Texas Comptroller's office can answer your question. Many small business owners consult with an accountant or tax professional to make sure they are handling this correctly.

Frequently Asked Questions

Is sales tax the same everywhere in Texas?

No. The state rate is 6.25 percent everywhere, but cities and counties add their own taxes on top. Your total rate depends on your zip code. Two cities 20 miles apart might have rates that differ by 0.5 to 1 percent. Use the Texas Comptroller's lookup tool to find your exact rate.

Why is candy taxed but groceries are not?

Texas law defines groceries as food you prepare at home to eat. Candy, soft drinks, and prepared foods are considered non-essential items and are taxed. The distinction is based on whether the item is a basic food staple or a prepared or luxury food product.

Do I pay sales tax on services like haircuts or car repairs?

No, services are generally not taxed in Texas. However, if the service includes a product — like paint for a house or parts for a car — the product portion may be taxed depending on how the invoice is itemized and the type of service.

What happens if an online seller does not charge me sales tax?

The seller is required by law to collect and remit Texas sales tax on orders delivered to Texas. If they do not charge it at checkout, they are not following the law. You are not responsible for paying it separately — the obligation is on the seller to collect and remit it.

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

Generally, no. Sales tax is final once you pay it at the register. However, if you return an item and receive a refund, the sales tax portion is refunded along with the purchase price. If you believe you were overcharged due to an error, contact the store directly.