Yes, Texas has a sales tax, and it applies to most goods you buy
Texas charges a state sales tax of 6.25 percent on most retail purchases. On top of that, most cities and counties add their own local sales tax, which ranges from 0.125 percent to 2 percent depending on where you live. Your total sales tax rate — state plus local — typically falls between 6.25 percent and 8.25 percent, though some areas go higher.
The tax is collected by the store at the register and sent to the state and local tax authorities. You do not file anything yourself for sales tax as a buyer — it is calculated and charged automatically when you check out.
Not everything is taxed the same way. Groceries, prescription medications, and some medical equipment are exempt or taxed at lower rates. Services like haircuts, plumbing, and consulting are usually not taxed. Understanding what is and is not taxed helps you predict your actual cost at checkout.
Key Takeaways
- Texas state sales tax is 6.25 percent, and most cities and counties add local tax on top, bringing your total rate to between 6.25 and 8.25 percent or higher.
- Groceries, prescription drugs, and certain medical devices are exempt from sales tax or taxed at a lower rate than other goods.
- Services such as haircuts, repairs, and professional consulting are generally not subject to sales tax in Texas.
- The tax is collected at the point of sale by the retailer, so you see the total price including tax on your receipt.
What the 6.25 percent state rate covers
The 6.25 percent state sales tax in Texas applies to tangible goods — things you can touch and take home. Clothing, electronics, furniture, toys, and most household items are all taxed at this rate. When you buy a shirt for $20, the state adds $1.25 in tax.
This rate has been in place since 1961 and does not change based on what you buy or where you live within the state. The state collects this money and distributes it to schools, roads, and other state services. Your local tax, however, varies by city and county.
How local sales tax stacks on top of the state rate
After the state takes 6.25 percent, your city or county may add more. A city might add 1 percent, and the county might add another 0.5 percent. That means your total rate becomes 7.75 percent. Some areas have combined local rates as high as 2 percent, pushing the total to 8.25 percent.
To find your exact local rate, search online for "[your city] sales tax rate" or call your city's tax assessor's office. You can also check the Texas Comptroller of Public Accounts website, which lists rates by location. The rate you see at checkout should match your city or county's combined total.
Local sales tax funds schools, public transportation, and city services. Different cities and counties set different rates based on their needs, which is why a purchase in Austin may cost a different percentage in tax than the same purchase in Houston.
What is exempt from sales tax in Texas
Groceries are the biggest exemption. Unprepared food you cook at home — bread, milk, eggs, vegetables, meat — is not taxed. However, prepared food from a deli counter, restaurant, or food truck is taxed at the full rate. A rotisserie chicken from the grocery store is taxed; raw chicken is not.
Prescription medications are also exempt. If your doctor writes a prescription and you fill it at a pharmacy, no sales tax is charged. Over-the-counter medications like aspirin or cold medicine are taxed. Some medical devices, such as diabetic testing supplies and prosthetics, are exempt, but others are not — the rules depend on the specific item.
Certain services are not taxed at all. A haircut, dental work, plumbing repair, or accounting consultation is not subject to sales tax. However, if you buy a product as part of that service — like hair dye or a replacement part — the product itself may be taxed.
How sales tax appears on your receipt
When you check out, the register calculates the tax based on your subtotal and your location. The receipt shows the subtotal, the tax amount, and the total you owe. If you buy $50 in items in a city with an 8 percent combined rate, you see $50 subtotal, $4 tax, and $54 total.
The retailer collects this tax and sends it to the state and local authorities on a schedule — usually monthly or quarterly, depending on the business size. You do not need to track or report sales tax as a buyer. The store handles all the paperwork.
If you buy something online from a Texas retailer, sales tax is usually added at checkout based on your delivery address. If you buy from an out-of-state retailer and have it shipped to Texas, the rules are more complex and depend on the retailer's policies and recent changes to tax law.
Sales tax on vehicles and major purchases
When you buy a car in Texas, sales tax applies to the purchase price. The tax rate is the same 6.25 percent state rate plus your local rate. If you buy a $25,000 vehicle in a city with 8 percent combined tax, you owe $2,000 in tax. You typically pay this at the time of registration with the Texas Department of Motor Vehicles.
If you trade in a vehicle, the tax is calculated on the net amount — the sale price minus the trade-in value. This reduces your tax bill. For example, if you buy a $25,000 car and trade in a $10,000 vehicle, you pay tax only on the $15,000 difference.
Real estate purchases are not subject to sales tax in Texas. When you buy a house or land, you pay transfer fees and other costs, but not a sales tax. This is true across all states.
Frequently Asked Questions
Do I pay sales tax on everything I buy in Texas?
No. Groceries, prescription medications, and certain medical devices are exempt. Services like haircuts and repairs are not taxed. Most other tangible goods are taxed at your local combined rate.
Why is my sales tax rate different from my neighbor's?
Your neighbor may live in a different city or county with a different local tax rate. While the state rate is always 6.25 percent, local rates vary. Two cities just miles apart can have different combined totals.
Is sales tax included in the price shown on the shelf?
No. Shelf prices in Texas do not include sales tax. The tax is added at checkout. This is why the final price you pay is higher than the price tag you see.
Do I pay sales tax on online purchases from Texas companies?
Usually yes. Most Texas retailers add sales tax to online orders based on your delivery address. However, the rules for out-of-state retailers are different and depend on the retailer's location and policies.
Can I get a refund of sales tax I already paid?
Generally no, unless you return the item. If you return a purchase, the store refunds the full amount including tax. Some businesses offer tax-exempt status for specific purposes, but this requires documentation and is not available to regular shoppers.