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Texas Sales Tax Range
6.375% – 8.25%
Category | Rate |
|---|---|
Statewide Base State Sales Tax Rate | 6.25% |
Local Rate | 0.125% – 2% |
The state sales tax rate in Texas (TX) is 6.25%, but with additional local taxes up to 2%, the combined rate can reach up to 8.25%, depending on the municipality.
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Key Facts About Texas Sales Tax
| - The statewide base sales tax rate applies on all taxable sales of goods and services.
Cities, counties, transit authorities, and special purpose districts in Texas can impose additional local sales taxes up to 2%.
Texas uses a “destination-based” sales tax sourcing system for remote sellers and marketplace facilitators, meaning tax is calculated based on the delivery location of the buyer rather than the seller’s location.
Remote sellers and marketplace facilitators (e.g., Amazon, Etsy) are required to collect Texas sales tax if they exceed $500,000 in annual sales to Texas customers.
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Texas Local Sales Tax
In Texas, the state sales tax rate is set at 6.25%, but that’s just the starting point. Local municipalities—such as cities, counties, transit authorities, and special purpose districts—have the authority to impose their own sales taxes, which can add up to an additional 2%, bringing the maximum combined rate to 8.25%
There are four main types of local taxing authorities in Texas:
Cities: Most cities in Texas charge a local sales tax. Major cities like Houston, Dallas, and Austin typically apply the full 2% local rate.
Counties: Some counties impose an extra sales tax, especially in rural or unincorporated areas.
Transit Authorities: In metropolitan areas with public transportation systems, an additional tax may be applied to fund these services.
Special Purpose Districts (SPDs): These are smaller taxing districts created for specific purposes, like fire safety, hospital districts, or economic development zones.
A city might apply a 1% tax, the county might apply 0.5%, and a transit authority could add another 0.5%. If a Special Purpose District is included, it can only apply up to the remaining 1% to stay within the 2% cap.
