Yes, Texas has a sales tax, and it applies to most purchases

Texas charges a state sales tax of 6.25 percent on most goods and services. On top of that, most Texas 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 state tax rate has been 6.25 percent since 1990 and does not change by location within Texas. What changes is the local portion. A purchase in Austin will have a different total tax rate than the same purchase in Houston or Dallas because each city and county sets its own rate.

Sales tax is collected by the business at the point of sale and sent to the Texas Comptroller of Public Accounts, which distributes it to state and local governments. You do not file anything yourself — the tax appears on your receipt.

Key Takeaways

  • Texas state sales tax is 6.25 percent on most goods and services, with local taxes adding 0.125 to 2 percent or more depending on your city and county.
  • Groceries, prescription medications, and certain medical equipment are exempt from sales tax in Texas.
  • Services like haircuts, repairs, and professional fees are generally not subject to sales tax unless they involve a taxable product.
  • Your total tax rate depends on where you make the purchase, not where you live, so the same item costs different amounts in different Texas cities.
  • Online purchases from out-of-state sellers may or may not include Texas sales tax depending on the seller's nexus in the state.

What is and is not taxed in Texas

Most tangible goods — clothing, electronics, furniture, household items — are taxed at the full state and local rate. However, Texas exempts certain categories entirely. Groceries for home consumption are not taxed, which includes items like bread, milk, vegetables, and meat from a grocery store. Restaurant meals and prepared foods are taxed.

Prescription medications are exempt when dispensed by a licensed pharmacist with a valid prescription. Over-the-counter medications like aspirin or cold medicine are taxed. Medical devices prescribed by a doctor — such as diabetic supplies, hearing aids, or prosthetics — are also exempt, but only if they meet specific criteria set by the Comptroller.

Most services are not taxed in Texas. A haircut, car repair, dental work, or plumbing service does not trigger sales tax. However, if a service involves selling a taxable product as part of the work — such as parts installed during a repair — the parts portion may be taxed depending on the nature of the service and how it is billed.

Clothing and shoes are taxed, with no exemption for children's clothing or any other category. Energy used in your home — electricity, natural gas, water — is taxed at a lower rate than general sales tax, typically around 5 percent.

How local sales tax rates work across Texas

Texas allows cities, counties, and special districts to impose their own sales taxes on top of the state rate. A city might add 1 percent, a county might add 0.5 percent, and a transit authority might add another 0.125 percent. These stack on top of each other and the state rate.

The total rate you pay depends on the exact location where the purchase happens. If you buy something in one city and pick it up in another, the tax rate of the pickup location applies. Online purchases are more complex: if the seller has a physical presence in Texas (called nexus), they must collect Texas tax. If they do not, Texas tax may not be included, though you are technically responsible for reporting it on your state return.

You can find your local sales tax rate on the Texas Comptroller website by entering your address or ZIP code. Rates change when cities or counties vote to increase or decrease their local portion, so the rate you paid last year may not be the rate you pay this year.

Sales tax on specific purchases

Some purchases fall into gray areas. Used items are taxed the same as new items when sold by a business. If you sell a used item to another person privately, no sales tax applies. Trade-ins — when you give an old item as part payment for a new one — are handled differently depending on the type of transaction; generally, you pay tax on the net amount you are charged, not the full price of the new item.

Digital goods like e-books, software, and streaming subscriptions are taxed in Texas. Vehicles are subject to sales tax when purchased from a dealer, though the rate and calculation can vary. Gasoline is taxed, but the tax is built into the pump price and does not appear separately on your receipt.

Alcohol and tobacco are subject to sales tax in addition to state excise taxes. Lottery tickets are not subject to sales tax. Firearms and ammunition are taxed like any other retail good.

Tax-exempt purchases and who qualifies

Certain organizations can make tax-exempt purchases in Texas. Nonprofits, schools, and government agencies can provide a tax exemption certificate to avoid paying sales tax on purchases related to their mission. A nonprofit must be registered with the Texas Comptroller and have an active exemption certificate number.

Farmers can claim exemption on certain equipment and supplies used directly in agricultural production. Manufacturers can claim exemption on equipment and materials used in the manufacturing process. These exemptions require proper documentation and registration with the Comptroller.

Individual consumers do not have a general sales tax exemption based on income or circumstance. The exemptions listed above — groceries, prescriptions, medical devices — explore to everyone equally.

How to find your exact sales tax rate

Your sales tax rate depends on your location down to the street address in some cases, because different taxing districts may overlap. The Texas Comptroller of Public Accounts maintains a sales tax rate lookup tool on its website where you can enter your address or ZIP code and see the exact combined rate.

If you are a business collecting sales tax, you must register with the Comptroller and file returns based on your location and sales volume. If you are a consumer, you do not need to register or file anything — the business handles it.

Frequently Asked Questions

Do I pay Texas sales tax on online purchases?

It depends on the seller. If the seller has a physical location, employees, or warehouse in Texas, they must collect and send Texas sales tax. If they do not have a presence in Texas, they typically do not collect it, though you may owe it on your state tax return. Most major online retailers now collect Texas tax.

Are groceries really tax-free in Texas?

Yes, groceries for home consumption are exempt from sales tax. This includes bread, produce, meat, dairy, and canned goods from a grocery store. Restaurant meals, prepared foods, and food eaten on premises are taxed. Alcohol and tobacco are not considered groceries and are taxed.

What if I buy something in one Texas city and use it in another?

Sales tax is based on where you make the purchase, not where you use the item. If you buy something in a city with an 8 percent rate and take it to a city with a 7 percent rate, you paid the 8 percent rate at purchase. You do not owe additional tax or get a refund based on where you use it.

Is there a sales tax on services like haircuts or car repairs?

No. Most services in Texas are not subject to sales tax. Haircuts, repairs, medical care, and professional services do not trigger sales tax. However, if parts or products are sold as part of the service, the product portion may be taxed depending on how it is billed.

Can I get a refund of sales tax I paid?

No. Sales tax is final once you pay it. You cannot request a refund from the business or the state based on your income or circumstance. The only exception is if you were overcharged due to an error — in that case, you would contact the business directly.