Texas charges a base sales tax of 6.25 percent on most goods, and cities and counties can add their own local taxes on top of that

Texas has one of the lower base sales tax rates in the country, but what you actually pay depends on where you shop. The state collects 6.25 percent on taxable purchases. Your city or county — or both — can layer on additional local sales taxes, which means the total rate at checkout ranges from 6.25 percent to over 8 percent depending on your location.

Unlike income tax, which Texas does not have, sales tax is collected at the register on most things you buy. The tax applies to tangible goods — clothing, groceries, electronics, furniture — and to some services. Food for home consumption is generally not taxed, but prepared food and restaurant meals are. Understanding what is and is not taxed, and what rate applies where you live, helps you budget accurately and spot errors on your receipt.

Key Takeaways

  • Texas state sales tax is 6.25 percent, but your actual rate is higher if your city or county adds local taxes, which can push the total to 8 percent or more.
  • Groceries and unprepared food are not taxed in Texas, but restaurant meals, prepared deli items, and hot food are subject to sales tax.
  • Clothing and shoes are taxed at the full rate in Texas, unlike some states that exempt them.
  • Online purchases from out-of-state sellers are subject to Texas sales tax if the seller has a physical presence in the state or meets federal economic nexus thresholds.
  • Local tax rates vary by city and county, so the same item costs different amounts in tax depending on where you buy it.

How the state and local tax rates stack

The 6.25 percent state rate is the floor. On top of that, cities can add up to 2 percent in local sales tax, and counties can add up to 2 percent. Some areas have both city and county taxes, which means they stack. A purchase in Austin, for example, is subject to the state rate plus Austin's local rate plus Travis County's local rate. A purchase in a smaller town with no city tax but a county tax will be lower.

You can find your exact local rate by entering your zip code on the Texas Comptroller of Public Accounts website, or by asking a cashier. The rate printed on your receipt is the combined total — you do not calculate it yourself. If you are shopping near a city or county border, the rate that applies is determined by where the business is located, not where you live.

What is taxed and what is not

Food you cook at home — raw meat, vegetables, bread, milk, eggs — is not taxed. This includes frozen vegetables and canned goods. However, prepared food is taxed. A rotisserie chicken from the grocery store deli counter is taxed. A sandwich from a deli is taxed. A hot pizza is taxed. Cold pizza from a box that has been sitting out is sometimes not taxed, depending on how the store categorizes it — this is a gray area that varies by retailer.

Clothing and shoes are taxed in Texas at the full rate, unlike states that exempt them. A shirt, pants, socks, and shoes all have sales tax applied. Accessories like belts and hats are also taxed. The only clothing exemption is for items used in a trade or profession — a chef's uniform or a nurse's scrubs may may have access to, but this is narrow and requires documentation.

Services are generally not taxed in Texas, with specific exceptions. Haircuts, car repairs, and plumbing are not taxed. However, certain services are taxed: hotel rooms, rental cars, and admissions to events like concerts or sports games. Telecommunications services — cell phone bills, internet — are subject to tax. Gasoline is taxed at the pump as part of the sales tax system.

Online and out-of-state purchases

If you order from an out-of-state retailer online, Texas sales tax still applies if that retailer has a physical presence in Texas — a warehouse, store, or office. Amazon, for example, collects Texas sales tax on most items because it has fulfillment centers in the state. Smaller online retailers that do not have a physical location in Texas are still required to collect sales tax if they meet federal economic nexus thresholds, which are based on sales volume or transaction count in the state.

In practice, most major online retailers now collect sales tax for Texas purchases. If a retailer does not collect it at checkout, you may be responsible for reporting it yourself on your tax return as "use tax" — tax on items purchased outside the state for use inside it. This is rare for individual consumers and is typically enforced for business purchases. Check your receipt or the retailer's tax policy if you are unsure whether tax was collected.

Tax-exempt purchases and who qualifies

Certain organizations and individuals do not pay sales tax on purchases. Religious organizations, nonprofits, and government agencies can buy goods tax-free if they have the proper exemption certificate. Schools and universities purchase materials tax-free. If you work for one of these organizations, you cannot use their exemption for personal purchases — the exemption applies only to purchases the organization makes for its own use.

Resellers — businesses that buy goods to resell them — do not pay sales tax on inventory purchases. They provide a resale certificate to the seller instead, and they collect sales tax from their own customers. If you are starting a small business and buying inventory, you will need to register with the Texas Comptroller and obtain a resale certificate to avoid paying tax on wholesale purchases.

Special situations and common questions

Trade-in allowances reduce the taxable amount. If you trade in a used car toward a new one, you pay sales tax only on the difference between the new car's price and the trade-in value. This applies to other goods too — if you trade in an old appliance when buying a new one, the tax is calculated on the net amount.

Shipping and handling charges are generally taxed if they are separately stated on the invoice. If shipping is bundled into the price, it is taxed as part of the total. This varies by retailer, so check the breakdown on your receipt or invoice. Returns work in reverse — if you return an item and get a refund, the sales tax is refunded as well. Keep your receipt to show proof of the original purchase and tax paid.

Frequently Asked Questions

Why does Texas not have an income tax?

Texas is one of nine states with no state income tax. The state funds government operations through sales tax, property tax, business taxes, and other revenue sources. This is a policy choice made by the state legislature, not a temporary situation. It means Texas residents do not file a state income tax return, but they pay higher sales taxes to compensate.

Do I pay sales tax on used items bought from a private person?

No. Sales tax applies only to sales by businesses and retailers. If you buy a used car, furniture, or clothing from a private individual — whether in person or online through a platform like Facebook Marketplace — no sales tax is owed. However, if you buy from a used goods dealer or pawn shop, sales tax applies because they are a business.

Is there a sales tax on prescription medications?

No. Prescription drugs are exempt from sales tax in Texas. Over-the-counter medications like pain relievers, cold medicine, and vitamins are taxed. The difference is whether a prescription is required — if it is, no tax applies. Check your receipt to confirm; the cashier should remove tax from prescription items at checkout.

What if the sales tax on my receipt is wrong?

Check the receipt against your local tax rate using the Texas Comptroller website. If the rate is incorrect, point it out to the store when ready — most will correct it and refund the difference. If you notice the error later, contact the store with your receipt. Systematic overcharging is rare, but it does happen and stores are required to correct it.

Do I owe sales tax on items I buy out of state and bring back to Texas?

Technically, yes — you owe use tax on items purchased outside Texas for use inside it. In practice, this is not enforced for individual consumers buying personal items. It is primarily enforced for business purchases. If you buy a car out of state and register it in Texas, you will pay tax based on the purchase price when you register it.