How Texas Sales Tax Works
Texas imposes a 6.25% state sales tax on all retail sales, leases, and rentals of most goods. Local taxing authorities can add up to 2% combined. Texas law caps the total at 8.25%. Houston, Dallas, Austin, San Antonio, Fort Worth, and virtually every major Texas city maxes out at 8.25%. Texas uses destination-based sourcing: the rate is determined by where the buyer receives the goods.
Texas Sales Tax Holiday — Back to School 2026
Texas holds an annual sales tax holiday, typically the third Friday through Sunday in August. During this weekend, clothing and footwear items priced under $100 per item are completely exempt from both state and local sales tax. School supplies under $100 are also tax-free. This holiday applies to personal purchases — not business purchases.
Texas Sales Tax Exemptions
Key Texas exemptions include most food and food ingredients for home preparation (excluding restaurant food, hot prepared meals, candy, and carbonated drinks), prescription drugs and certain OTC medications, agricultural and timber production items, and manufacturing machinery used directly in production.
Texas Economic Nexus — Online Sellers
Out-of-state businesses with $500,000 or more in Texas sales in the previous 12 calendar months must register with the Texas Comptroller and collect Texas sales tax. Marketplace facilitators like Amazon, eBay, and Etsy collect Texas tax on all Texas-destined sales.
How to Use This Texas Sales Tax Calculator
For Houston, Dallas, Austin, San Antonio, or Fort Worth — use 8.25%. That is the correct combined rate for all major Texas cities. Smaller or rural Texas locations may be lower — check the Texas Comptroller rate lookup at comptroller.texas.gov. Enter your pre-tax amount and click Calculate. Use reverse mode to extract the original price from a Texas receipt total.