Question 1

Why is the sales tax rate exactly 8.25% in almost every major Texas city?

Accepted Answer

Texas law caps the combined sales tax rate at 8.25% — the state takes 6.25% and local governments collectively can take no more than 2%. Since virtually every major Texas city levies the full 2% local add-on, you end up with a uniform 8.25% across Houston, Dallas, San Antonio, Austin, Fort Worth, and most other cities. The 2% local allocation is typically split: up to 1% for city general revenue, 0.5% for economic development (EDC), and 0.5% for crime control or other special purposes. The cap exists by statute — Texas Tax Code § 321.101 limits local sales taxes to prevent stacking the way some other states allow.

Question 2

Are groceries taxed in Texas?

Accepted Answer

Most grocery items (food and food ingredients for home preparation) are exempt from Texas sales tax. This exemption covers fresh produce, raw meats, bread, canned goods, pasta, dairy products, and similar items you'd buy at a grocery store for cooking at home. The exemption does NOT apply to: prepared foods meant for immediate consumption (hot deli items, restaurant food, pre-made sandwiches); most candy and chewing gum; alcoholic beverages; dietary supplements and vitamins. The line between 'food' and 'prepared food' is whether an item contains at least two of these: hot food, two or more food ingredients mixed or prepared by the seller, and utensils provided. A hot rotisserie chicken is taxable; a raw whole chicken is not.

Question 3

What is Texas's annual sales tax holiday?

Accepted Answer

Texas holds a 'Tax-Free Weekend' (officially the Sales Tax Holiday) each year, typically on the second Friday through Sunday of August. During this weekend, clothing and footwear priced under $100 per item, school supplies priced under $100, and backpacks priced under $100 are exempt from state and local sales tax. The exemption applies per item — you can buy multiple items under $100 each. A single item $100 or more is not exempt. The holiday typically applies to both in-store and online purchases shipped to Texas addresses. For a family spending $300 on back-to-school clothes and supplies, the savings run approximately $24.75 at the 8.25% rate.

Question 4

Does Texas charge sales tax on online purchases from out-of-state retailers?

Accepted Answer

Yes. Since 2019, Texas requires out-of-state online retailers to collect Texas sales tax if they have more than $500,000 in Texas sales annually (following the South Dakota v. Wayfair Supreme Court ruling). Most major online retailers — Amazon, Walmart.com, Target.com, and thousands of others — now collect Texas sales tax at checkout. For smaller retailers that don't collect Texas tax, buyers technically owe 'use tax' at the same rate they would have paid in sales tax, reportable on the Texas Franchise Tax return for businesses or through voluntary compliance for individuals. Texas actively enforces sales and use tax on business purchases.

Question 5

Is clothing taxable in Texas?

Accepted Answer

Yes, clothing is fully taxable in Texas at the standard rate (8.25% in most cities) year-round, with the exception of the annual back-to-school sales tax holiday weekend. This distinguishes Texas from states like New York and Pennsylvania, which permanently exempt most clothing from sales tax. During the Texas Tax-Free Weekend (typically second weekend of August), clothing items under $100 per item are temporarily exempt — but outside that one weekend, all clothing purchases are taxed. Footwear follows the same rule: taxable year-round, temporarily exempt during the holiday for items under $100.

Question 6

What items are always exempt from Texas sales tax?

Accepted Answer

Permanently exempt from Texas sales tax: prescription drugs (any amount, no prescription required for OTC meds if Rx-labeled — nuance here), over-the-counter medications (including vitamins classified as drugs by FDA), most medical equipment and devices, most grocery food items (see separate FAQ), residential electricity and gas (exempt when used for residential purposes), newspapers, agricultural equipment and supplies used directly in farming or ranching, and most items sold to nonprofit organizations for their charitable purposes. Texas also exempts sales to the federal government, state government, and most qualifying religious organizations.

Purchase	Tax	Total
$100.00	$8.25	$108.25
$500.00	$41.25	$541.25
$1,000.00	$82.50	$1,082.50

Purchase	Tax	Total
$100.00	$8.25	$108.25
$500.00	$41.25	$541.25
$1,000.00	$82.50	$1,082.50

Item	Price	Sales Tax	Total	Status
Groceries	$150.00	$0.00	$150.00	Exempt
Electronics ($500 TV)	$500.00	$41.25	$541.25	Taxable
Clothing ($80 jacket)	$80.00	$6.60	$86.60	Taxable
Restaurant Meal	$60.00	$4.95	$64.95	Taxable

Texas Sales Tax Calculator 2026

Texas Sales Tax Calculator

Texas Sales Tax Guide 2026

Texas Sales Tax Rates by City / County

Tax-Exempt Categories in Texas

Worked Examples: Texas Sales Tax

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Texas Sales Tax: Frequently Asked Questions

Sources & Methodology

Compare with Nearby States

Location	State	Local	Combined	Tax on $100
Houstoncity	6.25%	2%	8.25%	$8.25
Dallascity	6.25%	2%	8.25%	$8.25
San Antoniocity	6.25%	2%	8.25%	$8.25
Austincity	6.25%	2%	8.25%	$8.25
Fort Worthcity	6.25%	2%	8.25%	$8.25
El Pasocity	6.25%	2%	8.25%	$8.25
Arlingtoncity	6.25%	2%	8.25%	$8.25
Corpus Christicity	6.25%	2%	8.25%	$8.25
Planocity	6.25%	2%	8.25%	$8.25
Lubbockcity	6.25%	2%	8.25%	$8.25