Texas relies on sales tax more than most states because it collects no personal income tax at all. That means the rate you pay at checkout in Houston, Dallas, Austin, or San Antonio directly funds schools, roads, transit, and emergency services across the state. If you just moved to Texas, started a business, or simply want to understand why your receipt looks the way it does, knowing the combined sales tax rate in your city is essential.
How Texas Sales Tax Works
The Texas state sales tax rate is 6.25 percent, and it applies to most retail purchases of tangible goods and certain services. On top of that base rate, cities, counties, transit authorities, and special purpose districts can each add their own local taxes. However, the total combined rate can never exceed 8.25 percent. That 2 percent cap on local additions is set by state law and applies statewide, no matter how many local jurisdictions overlap in your area.
This structure means that a shopper in downtown Houston technically pays taxes to the state, the city, the Metropolitan Transit Authority, and potentially a special district, but the total on the receipt stays at 8.25 percent because the cap prevents it from going higher. The Texas Comptroller of Public Accounts administers all of these taxes through a single return, so businesses file one report regardless of how many jurisdictions they sell into.
One important detail is that Texas uses destination-based sourcing for most transactions. If you ship goods to a customer, you charge the rate at their delivery address, not the rate at your warehouse. For in-person sales where the buyer walks out with the item, you charge the rate at your store location. This distinction matters most when selling to customers in smaller towns or unincorporated areas where combined rates are lower than the 8.25 percent cap.
Major Texas Cities and Their 2026 Combined Rates
Almost every major city in Texas charges the maximum combined rate of 8.25 percent in 2026. Here is a breakdown of the largest cities and how their local components add up to reach that cap.
Houston has a combined rate of 8.25 percent. The 6.25 percent state rate is supplemented by the city’s own levy plus the Houston Metropolitan Transit Authority tax. Harris County itself does not add a separate county sales tax, but the MTA component and city tax together fill the 2 percent local cap.
Dallas also sits at 8.25 percent. The local portion includes the city of Dallas tax and the Dallas Area Rapid Transit (DART) tax. Shoppers in downtown Dallas, Deep Ellum, or the suburbs within city limits all pay the same combined rate.
San Antonio charges 8.25 percent as well. The local components include the city sales tax and the VIA Metropolitan Transit authority tax. Bexar County adds no separate county-level sales tax because the combined rate is already at the statewide maximum.
Austin matches the other metros at 8.25 percent. The city tax and Capital Metropolitan Transportation Authority tax combine to fill the entire 2 percent local allowance. This rate applies across the Austin city limits, including areas like Round Rock and Cedar Park that have their own city taxes but still hit the 8.25 percent cap.
Fort Worth charges 8.25 percent. The local allocation includes the city tax and a portion for Trinity Metro, the regional transit authority serving Tarrant County.
El Paso also comes in at 8.25 percent. The city tax plus local district taxes reach the combined maximum.
Other cities at 8.25 percent in 2026 include Arlington, Plano, Laredo, Corpus Christi, Lubbock, Garland, Irving, Amarillo, Grand Prairie, McKinney, Frisco, Pasadena, Mesquite, Killeen, McAllen, Midland, Odessa, Beaumont, Waco, and Brownsville. According to a 2026 analysis, roughly 77 percent of all Texas cities levy the maximum combined rate.
Cities and Areas With Lower Combined Rates
Not every location in Texas reaches the 8.25 percent ceiling. Unincorporated areas outside any city limits often have lower combined rates because there is no city-level tax. In these areas, you might pay only the 6.25 percent state rate plus whatever county or special district taxes apply, if any. Many rural Texas counties do not impose a county-level sales tax at all.
Some smaller municipalities have not adopted the full local rate either. For example, Meadowlakes in Burnet County has one of the lowest combined sales tax rates in the state at just 6.25 percent, essentially only the state portion. Other small towns along the Texas-Mexico border and in the Panhandle region tend to have slightly lower averages, with the Panhandle averaging around 8.00 percent compared to the statewide urban norm of 8.25 percent.
If you operate a business and ship products to various Texas addresses, the difference between an 8.25 percent destination and a 6.75 percent destination can add up over thousands of transactions. The Texas Comptroller provides a free Sales Tax Rate Locator tool at comptroller.texas.gov where you can enter any street address and get the exact combined rate for that location.
What Is Taxable and What Is Exempt
Texas charges sales tax on most tangible personal property, including clothing, electronics, furniture, prepared food, candy, soft drinks, and digital products like apps and ebooks. Delivery and shipping charges are generally taxable when they are part of a taxable sale.
However, several important categories are exempt from Texas sales tax. Unprepared grocery food like raw meat, vegetables, bread, and canned goods is not taxed at any rate. Prescription drugs, over-the-counter medicines with a drug facts label, and medical devices are also exempt. Agricultural equipment purchased with a valid Ag/Timber Number is exempt, and manufacturing equipment used directly in the production process qualifies for an exemption as well.
Texas also does not tax most services. Only services specifically listed in the Tax Code are taxable, which includes things like cable television, pest control, and certain security services. Professional services like legal, accounting, and consulting fees are not subject to Texas sales tax.
How the Sales Tax Holiday Affects These Rates
Once a year, Texas holds a Sales Tax Holiday during which qualifying items are completely exempt from both state and local sales tax. In 2026, this holiday ran from Friday, August 7 through midnight Sunday, August 9. During this weekend, most clothing, footwear, school supplies, and backpacks priced under $100 per item were sold without any sales tax at all.
The savings on a single item at the 8.25 percent rate amount to about $8 for every $100 spent. The Texas Comptroller estimated that families saved approximately $142.5 million in combined state and local sales taxes during the 2026 holiday. Since 1999, Texans have saved more than $2 billion through this annual event.
The key rule is that the item’s total sales price, including any shipping and handling charges, must be under $100 for the exemption to apply. A pair of jeans priced at $95 with $10 shipping totals $105 and does not qualify, even though the item itself was under the threshold.
Sales Tax and the Bigger Texas Tax Picture
Because Texas has no state income tax, sales tax and property tax are the two main revenue sources for the state. The state collects approximately $4.2 billion per month in sales tax revenue alone, making it the single largest source of state funding.
This heavy reliance on sales tax has trade-offs. It keeps your paycheck untouched by state income withholding, but it means that everyday purchases carry a higher tax load than in states that spread the burden across income, sales, and property taxes more evenly. For a detailed breakdown of every tax Texans actually pay, see our guide on what taxes you pay in Texas.
For business owners, the combined rate directly affects pricing strategy, point-of-sale configuration, and compliance. If you are setting up a new business, you will need a Texas Sales Tax Permit before collecting any sales tax. Registration is free through the Texas Comptroller’s eSystems portal, and the process takes about 20 to 40 minutes online.
Frequently Asked Questions
What is the total sales tax rate in Houston, Texas in 2026?
The combined sales tax rate in Houston is 8.25 percent, which includes the 6.25 percent state rate plus 2 percent in local taxes from the city and the Metropolitan Transit Authority.
Are there any Texas cities with sales tax lower than 8.25 percent?
Yes. Some smaller municipalities and unincorporated areas have combined rates below 8.25 percent. Meadowlakes in Burnet County charges only 6.25 percent. About 23 percent of Texas cities have not adopted the full local rate.
Is grocery food taxed in Texas?
No. Unprepared grocery food such as raw meat, vegetables, bread, dairy products, and canned goods is exempt from Texas sales tax. However, prepared food, candy, and soft drinks are taxable.
Do online purchases shipped to Texas include local sales tax?
Yes. Texas uses destination-based sourcing for shipped goods, meaning the combined rate at the delivery address applies. If you order online and the item ships to a Houston address, you pay the full 8.25 percent.
How can I find the exact sales tax rate for my Texas address?
The Texas Comptroller’s Sales Tax Rate Locator tool at comptroller.texas.gov lets you enter any street address and returns the exact combined state and local rate for that location.