State Sales Tax

6.25% on clothing purchases

Local Sales Tax

Up to 2%, making the maximum combined rate 8.25%

Total Tax Rate

Varies by city, ranging from 6.25% to 8.25%

Sales Tax Holiday

Held annually in August, exempting qualifying clothing under $100

Houston

8.25%

$100

$8.25

Dallas

8.25%

$100

$8.25

Austin

8.25%

$100

$8.25

San Antonio

8.25%

$100

$8.25

El Paso

8.25%

$100

$8.25

Accessories

Handbags, jewelry, watches, sunglasses

Specialty Footwear

Cleats, ski boots, ballet slippers

Protective Gear

Helmets, safety vests, knee pads

Formal Wear

Tuxedos, wedding gowns, costume rentals

Clothing item under $100 during tax holiday

$80

0%

$0

Exempt during the tax-free weekend.

Clothing item above $100 during tax holiday

$120

8.25%

$9.90

Only the first $100 is exempt; the remaining $20 is taxable.

Taxable clothing item below $100 during tax holiday

$50

8.25%

$4.13

Accessories and protective gear remain taxable.

Clothing item under $100 outside tax holiday

$80

8.25%

$6.60

Fully taxable since it’s not during the tax holiday.

Clothing item above $100 outside tax holiday

$120

8.25%

$9.90

Regular clothing is always taxed outside the holiday.

Taxable clothing item below $100 outside tax holiday

$50

8.25%

$4.13

Items like handbags and safety gear are always taxable.

Sales Tax Holiday

Clothing under $100 is tax-free during Texas’s August tax-free weekend.

A customer buys a $90 shirt during the holiday.

$7.43 saved.

Resale Purchases

Retailers buying inventory for resale are exempt with a valid resale certificate.

A boutique buys $5,000 in wholesale clothing for resale.

$412.50 saved.

Nonprofit Organizations

Some 501(c)(3) charities qualify for exemptions on clothing purchases.

A nonprofit buys $2,000 worth of uniforms for volunteers.

$165.00 saved.

Government Purchases

Clothing bought for official federal, state, or local government use is exempt.

A police department buys $10,000 in uniforms for officers.

$825.00 saved.

Sales Tax Holiday

Purchase qualifying clothing under $100 during the annual August tax-free weekend.

$8.25 saved on a $100 item

Resale Purchases

Provide a valid Texas Sales and Use Tax Resale Certificate (Form 01-339) for inventory purchases.

$412.50 saved on $5,000 inventory

Nonprofit Organizations

Submit proof of 501(c)(3) status and use the exemption for qualifying purchases.

$165 saved on $2,000 in uniforms

Government Purchases

Purchases must be made directly by a government entity for official use.

$825 saved on $10,000 in uniforms

Resale Purchases

Texas Sales and Use Tax Resale Certificate (Form 01-339)

Retailers purchasing inventory for resale must complete this form to certify that the items are for resale and therefore exempt from sales tax.

Nonprofit Organizations

Application for Exemption – Charitable Organizations (Form AP-205)

Nonprofit entities seeking tax-exempt status in Texas should submit this application to the Texas Comptroller to obtain exemption from sales tax on qualifying purchases.

Government Purchases

Texas Sales and Use Tax Exemption Certification (Form 01-339)

Government entities can use this form to certify their exemption from sales tax when making official purchases.

Sales Tax Rate

State tax: 6.25% + local tax (up to 2%) = max 8.25%

A boutique in Dallas applies an 8.25% tax on sales.

Sales Tax Permit

Required for all retailers; register with the Texas Comptroller

A new store registers before making taxable sales.

Tax Collection & Remittance

Businesses must collect tax and remit it to the state based on filing frequency (monthly, quarterly, annually).

A retailer with $50,000 in sales collects $4,125 in tax.

Exemptions

Sales for resale, nonprofit organizations, and government purchases may qualify for exemption.

A store selling wholesale goods uses a resale certificate.

Sales Tax Reporting

Businesses must file sales tax returns online through the Texas Comptroller’s portal.

A retailer submits quarterly tax reports to stay compliant.

Penalties for Non-Compliance

Late or incorrect filings may result in fines, interest, or audits.

A business failing to file on time faces penalties.

Taxable vs. Non-Taxable Apparel

Differentiates between taxable and exempt items (e.g., sales tax holidays).

Ensures compliance with exemptions.

Sales Tax Rate Variability

Automates state (6.25%) and local tax rate calculations for accurate total rates.

Prevents overpayment or underpayment.

Exemption Certificate Management

Tracks and validates resale certificates for wholesale apparel purchases.

Reduces audit risks and ensures proper tax collection.

Sales Tax Holidays

Automatically applies exemptions for qualifying items during tax-free periods.

Maximizes compliance during exemptions.

Reporting and Filing

Generates detailed sales tax reports for state filings.

Saves time and ensures accuracy.