Texas Sales Tax Calculator

Why almost every Texas city charges 8.25%

Texas charges a 6.25% state sales and use tax, and cities, counties, transit authorities and special purpose districts can add up to 2% between them. That gives a maximum combined rate of 8.25%. Houston, Dallas, Austin and San Antonio are all at 8.25%, because the local 2% is fully used there.

The cap is on the total, not on each local body. If a city takes 1% and a transit authority takes 1%, the county cannot add any more inside that city. That is why rates in rural areas can be lower, and why a few places with no local tax charge only the 6.25% state rate. The average combined rate is 8.2%.

To find the rate for an exact address, use the Texas Comptroller’s Sales Tax Rate Locator. It shows each local body that taxes that address. The Comptroller also publishes a rate history for every city, county, transit authority and special purpose district.

What Texas does not tax

Groceries are exempt in Texas: flour, sugar, bread, milk, eggs, fruit, vegetables and similar food are not taxed. The Comptroller’s grocery guide lists the many exceptions, and they can catch you out at the till.

• Taxable even in a grocery store: candy and gum, soft drinks (including most energy and sports drinks), beer and wine, ice, and prepared food.
• Bakery items are tax-free from a business that qualifies as a bakery (more than half its sales are bakery items to take away). Elsewhere they are taxable if heated or sold with plates or utensils.
• Over-the-counter medicines with an FDA “Drug Facts” label are exempt. Prescription drugs are exempt as well.
• Pet medicines such as flea treatments are exempt only with a veterinarian’s prescription.

Three Texas sales tax holidays a year

Texas holds three separate tax-free weekends a year, each covering different items. Each one exempts qualifying items from both state and local tax, and you don’t need an exemption certificate.

Delivery charges count toward the holiday caps

The price caps apply to the total sales price, including delivery. The Comptroller gives two examples. A $95 pair of jeans with a $10 delivery charge costs $105, so it is fully taxable. A $1,995 refrigerator with $50 delivery comes to $2,045, which is over the $2,000 cap, so tax is due on the whole $2,045.

At 8.25%, that delivery fee costs the fridge buyer $168.71 in tax. Choosing free pickup would have avoided it.

Use tax: out-of-state, online and Mexico purchases

You owe Texas use tax if you buy something taxable for use in Texas and the seller doesn’t charge Texas tax. This includes goods bought in Mexico and brought back. It also applies when you buy in a part of Texas with no local tax and take the item home to a city that has one. The Comptroller’s example: a $200 coffee table bought where only the 6.25% state tax was charged, taken home to a city with a 2% local tax, owes $4 of local use tax.

Individuals without a sales tax permit report it on Form 01-156, Texas Use Tax Return. If you owe less than $1,000 in a year, it is due by January 20 of the next year. Once your total reaches $1,000, it is due by the 20th of the following month. Texas gives credit for sales tax paid to another state.

Buying a car in Texas

The tax on a car in Texas is 6.25% of the sales price minus any trade-in, paid to the county tax assessor-collector. The Comptroller lists one statewide rate for motor vehicle sales tax, with no local add-on. Dealers collect it for vehicles of 11,000 pounds or less. In private sales, the buyer pays it within 30 days. The taxable value may be set by the vehicle’s “standard presumptive value” instead of the price you report.

On a $30,000 car with an $8,000 trade-in, the tax is $1,375.00. A new resident bringing a car already registered in their name in another state pays a flat $90 instead of use tax. Paying late adds a 5% penalty, rising to 10% after 30 days.

Reversing an 8.25% Texas receipt

Divide a tax-included total by 1.0825 to get the pre-tax price. The Comptroller uses this method in its own guidance: $1,500 of tax-included sales ÷ 1.0825 = $1,385.68, so the tax inside is $114.32. A $54.13 restaurant bill works out the same way: $50.00 of food plus $4.13 of tax.