Texas Financial Calculators and Tax Info 2026
Last updated: May 2026 · Data: US Census Bureau, Tax Foundation, Zillow, Avalara
Texas Financial Snapshot
| Median Household Income | $73,035 |
| Cost of Living Index | 93 (7% below national avg) |
| Top State Income Tax Rate | None (0%) |
| State Sales Tax Rate | 6.25% |
| Avg Combined Sales Tax | 8.19% |
| Effective Property Tax Rate | 1.68% |
| Median Home Price | $315,000 |
| State Capital | Austin |
| Top 3 Cities by Population | Houston, San Antonio, Dallas |
Texas Financial Overview 2026
Texas has made its tax choice clear: fund state government through consumption and property rather than income. Article VIII, Section 24 of the Texas Constitution prohibits a personal income tax without voter approval, and a 2019 constitutional amendment made that even harder. Every Texas W-2 earner's paycheck shows only federal withholding and FICA — no state income tax line exists.
The tradeoff is property tax. Texas property taxes average 1.68% of assessed value — the sixth-highest rate in the nation. In fast-growing markets like Austin, Frisco, and Plano, combined school district and county rates commonly run 1.8%–2.5%. On a $315,000 home, that's $5,292/year in property taxes before your first dollar goes to principal. The 2023 increase in the homestead exemption (now $100,000 off school district assessed value) provides real relief — saving approximately $1,200/year on a home assessed at $350,000 — but the underlying rates remain high.
Homeowner's insurance is another above-average cost. Texas faces the broadest combination of catastrophic weather risks of any U.S. state: Gulf Coast hurricanes, North Texas tornadoes, statewide hailstorms, and the risk of winter freeze events (demonstrated by 2021's Winter Storm Uri). Average premiums run $3,500/year statewide — among the top 3 nationally — and buyers in coastal Galveston, Corpus Christi, or high-hail-frequency Dallas suburbs often pay considerably more.
Sales tax in Texas is effectively capped at 8.25% statewide. Cities add 2% to the state's 6.25% and virtually every major Texas city does exactly that: Houston, Dallas, San Antonio, Austin, and Fort Worth all hit the 8.25% ceiling. The system is simple and predictable. Groceries, prescription drugs, and OTC medications are fully exempt — meaningful relief given Texas's full reliance on sales tax for local revenue.
Texas's cost of living index of 93 (7% below national average) combined with no income tax makes it a compelling destination for high earners relocating from California, New York, or New Jersey. A $200,000 earner moving from California saves approximately $18,000–$20,000/year in state income tax and SDI. The property tax differential partially offsets this but rarely eliminates it for high-income households.
Calculators for Texas
Three specialized calculators with real Texas tax rates, home prices, and deduction rules.