Texas tax guide: sales, income and property tax
Three taxes decide most everyday money calculations in Texas: what you pay at the register, what leaves your paycheck, and what your home costs each year. This guide sets out each one with the current figures, then links to the calculators that apply them. Rates are reviewed against state sources; confirm a specific transaction with the Texas Department of Revenue.
The short answer
Texas: 6.25% state sales tax, about 8.2% average combined (rank 14 of 51 — 1.59 points above the 6.61% all-state average), no state income tax, and an average effective property tax of 1.6% (rank 8 of 51). On a $100 purchase at the average combined rate, the tax is $8.
Sales tax in Texas
The statewide base rate is 6.25%. Counties, cities and special districts add their own layers, bringing the average combined rate to about 8.2% — and the rate at a specific address can sit well above or below that average. On a $100 purchase, the tax is $6 at the base rate and roughly $8 at the average combined rate. The difference is local tax, which is why two towns in the same state can charge noticeably different totals on the same item.
Groceries are generally exempt from the state sales tax; local rules can differ. Prepared foods and candy/soda exceptions apply.
Worked examples at the average combined rate
What the 8.2% average combined rate adds to purchases of different sizes:
| Purchase | Tax | Total |
|---|---|---|
| $25 | $2 | $27 |
| $100 | $8 | $108 |
| $500 | $41 | $541 |
| $1,000 | $82 | $1,082 |
| $10,000 | $820 | $10,820 |
If you sell into Texas from another state, economic nexus rules can oblige you to collect its tax once your sales pass the state's threshold — the exact threshold and what counts toward it are in the Texas sales tax calculator and rate page, and the data hub for the state is the Texas locations page.
Income tax in Texas
Texas levies no state income tax on wages. That raises take-home pay compared with an identical salary in a taxing state, but the revenue shows up elsewhere — in Texas that usually means some mix of sales and property taxes, which is why the three taxes on this page should be read together.
Federal tax applies the same everywhere; the state layer is what changes a paycheck between two states. Run the same salary through the paycheck calculator and the take-home pay calculator with and without a state rate to see the size of the difference before negotiating a move or a remote-work arrangement.
Property tax in Texas
The average effective property tax rate in Texas is about 1.6% of a home's value per year. On a $400,000 home that is roughly $6,400 a year, or $533 a month — a real line in the housing budget, collected through escrow in most mortgages. Averages hide wide local variation: the county and school district set most of the rate, and homestead exemptions can cut the taxable value for owner-occupiers.
How Texas compares
The states closest to Texas on average combined sales tax, with the national extremes for scale. The all-state averages across the 51 entries are 6.61% for combined sales tax and 1.04% for property tax.
| State | Combined sales tax | Property tax |
|---|---|---|
| Texas (this guide) | 8.2% | 1.6% |
| Arizona | 8.4% | 0.51% |
| Missouri | 8.35% | 0.97% |
| Nevada | 8.23% | 0.53% |
| Minnesota | 8.04% | 1.08% |
| Louisiana — highest combined | 9.56% | 0.55% |
| Oregon — lowest combined | 0% | 0.82% |
What this means for your money
Texas does not tax wages, but the revenue is recovered elsewhere. Property tax is the main lever: at an average effective rate of 1.6% (rank 8 of 51, against an all-state average of 1.04%), a $400,000 home carries about $6,400 a year — collected monthly through mortgage escrow, so it shows up as a higher monthly payment rather than an annual bill. Renters feel it indirectly through rent.
Read together: Texas combines an average combined sales tax of 8.2% (rank 14 of 51), an average effective property tax of 1.6% (rank 8 of 51) and no state tax on wages. A household comparing states should compare all three against its own pattern — a high earner who rents weighs the income tax most; a homeowner on a fixed income weighs the property tax most.
Key figures
| Figure | Texas |
|---|---|
| State sales tax (base) | 6.25% |
| Average combined sales tax | 8.2% |
| Groceries | Exempt (state level) |
| Income tax structure | None |
| Average effective property tax | 1.6% |
| Capital | Austin |
| Largest city | Houston |
City guides in Texas
Combined rates inside the largest cities, and how each is built:
- Houston sales tax guide — 8.25% combined
- San Antonio sales tax guide — 8.25% combined
- Dallas sales tax guide — 8.25% combined
- Austin sales tax guide — 8.25% combined
- Fort Worth sales tax guide — 8.25% combined
Sales tax · average combined
Property tax · average effective
Chart: DailyFinance.tools · Rates are reviewed averages from our state tax dataset — your exact local rate may differ.
Texas tax FAQs
What is the sales tax rate in Texas?
The statewide base rate in Texas is 6.25%. With local taxes added, the average combined rate is about 8.2%, and the exact rate depends on where the sale takes place.
Does Texas have a state income tax?
No. Texas does not tax wage income at the state level.
Are groceries taxed in Texas?
Groceries are generally exempt from the state sales tax; local rules can differ. Prepared foods and candy/soda exceptions apply.
How does Texas rank for sales tax nationally?
Texas's average combined rate of 8.2% ranks 14 of 51 states and DC (1 = highest) — 1.59 points above the all-state average of 6.61%. The highest average combined rate is Louisiana at 9.56%; the lowest is Oregon at 0%.
How much property tax do you pay in Texas?
The average effective property tax rate in Texas is about 1.6% of a home's value per year — rank 8 of 51, against an all-state average of 1.04%. On a $400,000 home that is roughly $6,400 a year. County assessors set actual bills, and exemptions can reduce them.
Where can I verify Texas tax rates?
The rates in this guide are reviewed averages for planning. For a filing or a specific address, confirm the current rate with the Texas Department of Revenue (sales and income tax) or the county assessor (property tax).
Reviewed by Tahir Shehzad, ACMA · State tax data reviewed November 2026 against official sources — see our Methodology and Editorial Policy. Figures are educational estimates, not tax or financial advice. For a filing decision, confirm with the Texas Department of Revenue.