The Texas state sales tax rate is 6.25%. But almost every sale in Texas is also subject to local taxes — city, county, transit authority, and special district levies that stack on top of the state rate. The combined total can reach 8.25%, the legal cap under Texas law, and most major Texas cities are already there. Charge the wrong rate and you under-collect tax; the Comptroller holds you liable for the shortfall, not your customer.
How Texas Sales Tax Rates Work
Texas splits sales tax between two layers:
- State rate: 6.25% — collected on every taxable sale statewide, remitted to the Texas Comptroller
- Local rate: up to 2.0% — made up of city, county, transit authority, and special district levies
- Combined cap: 8.25% — no matter how many local taxing entities layer on top, the total cannot exceed 8.25%
The local 2% is rarely a single tax. A city might levy 1.5%, a county might add 0.25%, and a transit district might add another 0.25% — all within the 2% ceiling. The exact mix depends on which taxing jurisdictions cover the physical location where the sale occurs. The Comptroller collects everything in one return and distributes local shares to each jurisdiction on the back end.
Common mistake: Many first-time LLC owners charge a flat 6.25% because that is the "Texas rate" they read about. That is only the state portion. If you sell in Houston, Dallas, Austin, or any other major Texas city — or ship goods to a buyer there — you owe the full 8.25% combined rate. Under-collecting the difference comes out of your margin.
This step should take about 5 minutes to understand before setting up your point-of-sale or e-commerce system.
Texas Sales Tax Rates by City (2026)
Most major Texas cities have reached the 8.25% combined cap. Use this table as a quick reference, then verify any specific address with the Comptroller's rate lookup tool before relying on it for filing.
| City | State Rate | Local Rate | Combined Rate |
|---|---|---|---|
| Austin | 6.25% | 2.00% | 8.25% |
| Dallas | 6.25% | 2.00% | 8.25% |
| Houston | 6.25% | 2.00% | 8.25% |
| San Antonio | 6.25% | 2.00% | 8.25% |
| Fort Worth | 6.25% | 2.00% | 8.25% |
| El Paso | 6.25% | 2.00% | 8.25% |
| Arlington | 6.25% | 2.00% | 8.25% |
| Corpus Christi | 6.25% | 2.00% | 8.25% |
| Plano | 6.25% | 2.00% | 8.25% |
| Lubbock | 6.25% | 2.00% | 8.25% |
| Laredo | 6.25% | 2.00% | 8.25% |
| Amarillo | 6.25% | 2.00% | 8.25% |
| Garland | 6.25% | 2.00% | 8.25% |
| Irving | 6.25% | 2.00% | 8.25% |
| Frisco | 6.25% | 2.00% | 8.25% |
| McKinney | 6.25% | 2.00% | 8.25% |
What about unincorporated areas and smaller cities? Not every location in Texas has reached the 8.25% cap. Unincorporated areas outside any city limits may have lower combined rates because there is no city levy — only county and any applicable special district taxes. Some smaller municipalities have not adopted the full local rate. Always use the Comptroller's rate locator for addresses you are not certain about.
Step 1: Look Up the Exact Rate for Your Address
The Texas Comptroller provides a free, address-specific sales tax rate lookup at comptroller.texas.gov/taxes/sales/. To use it:
- Go to the Comptroller's sales tax home page and find the "Sales Tax Rate Locator" tool (linked from the tools section of the page)
- Enter the full street address, city, and ZIP code for the location where the sale occurs — not your business address unless the customer takes possession there
- The tool returns the exact combined rate for that address, broken down by state, city, county, and any special district components
- Save or screenshot the result for your records, especially when setting up your accounting or e-commerce system
This lookup is authoritative. If the result conflicts with what you expect, trust the lookup and update your system. Rates change when cities create new special purpose districts or transit authorities adjust their levies — changes that will not be reflected in a table you read once.
Common mistake: Many sellers look up the ZIP code rate instead of the street address rate. ZIP code boundaries do not align perfectly with tax jurisdiction boundaries. Two addresses on the same street can sometimes have different rates if they sit in different taxing districts. Always use the full street address lookup.
This step should take about 3 minutes.
Step 2: Apply the Correct Rate to Each Sale
Texas is a destination-based sales tax state for most transactions. The rule:
- Shipped or delivered goods: charge the rate at the delivery address
- In-person pickup: charge the rate at the location where the customer takes possession
- Services: generally taxed at the rate where the service is performed
If you operate a store in Houston, every over-the-counter sale uses the Houston rate (8.25%). If you also ship to a customer in a smaller city sitting at a lower combined rate, you charge that city's rate for the shipped order — not Houston's.
For e-commerce sellers, this means applying a different rate for each Texas delivery address. Most major platforms — Shopify, Square, WooCommerce, QuickBooks — have a Texas sales tax integration that pulls Comptroller address data automatically. Enable it and confirm it is pulling address-level rates, not a flat statewide average. Review the settings at least annually since rates can change.
Common mistake: Out-of-state sellers with Texas nexus sometimes apply their home state's rate to Texas orders. If you have economic nexus in Texas (over $500,000 in Texas sales in the preceding calendar year) or a physical presence here, you must collect Texas tax at the correct combined rate for each Texas delivery address.
For a full picture of your Texas sales tax obligations — including permit requirements, filing frequency, and penalties — see the Texas LLC sales tax permit guide and Texas sales tax due dates 2026.
This step should take about 10 minutes to configure your payment or e-commerce platform.
Quick reference
| Detail | Info |
|---|---|
| What | Texas sales tax — state rate plus local combined rate |
| State rate | 6.25% |
| Maximum local rate | 2.00% |
| Maximum combined rate | 8.25% |
| Most major Texas cities | 8.25% combined |
| Rate lookup tool | comptroller.texas.gov/taxes/sales/ |
| Which rate applies | Rate at buyer's location (destination-based state) |
| Permit required | Yes — free Texas Sales Tax Permit from Comptroller |
Frequently asked questions
What is the sales tax rate in Houston Texas?
The combined sales tax rate in Houston is 8.25% — the 6.25% Texas state rate plus 2.00% in local taxes. The local portion includes the city of Houston levy, the Metropolitan Transit Authority (MTA), and other special district components. Use this rate for taxable sales made at Houston locations or shipped to Houston delivery addresses.
What is the sales tax rate in Dallas Texas?
Dallas has a combined sales tax rate of 8.25%, made up of the 6.25% state rate plus 2.00% local (city of Dallas levy, Dallas Area Rapid Transit, and other special district amounts). Apply this rate to taxable sales at Dallas locations or goods shipped to Dallas addresses.
What is the sales tax rate in Austin Texas?
Austin's combined sales tax rate is 8.25% — 6.25% state plus 2.00% local (city of Austin, Capital Metro transit authority, and other local levies). This applies to taxable sales at Austin locations and goods shipped to Austin addresses.
How do I find the exact sales tax rate for any Texas address?
Use the Texas Comptroller's free Sales Tax Rate Locator at comptroller.texas.gov/taxes/sales/. Enter the full street address — not just the city or ZIP — because tax jurisdiction lines do not always match city limits or ZIP code boundaries. The tool returns the current combined rate and breaks it down by each taxing entity (state, city, county, transit district).
Do I charge the sales tax rate where I am located or where my customer is?
Texas is a destination-based state for most transactions. For shipped or delivered goods, charge the rate at the delivery address. For in-person sales where the customer takes the item from your location, charge the rate at your business address. Since most major Texas cities share the 8.25% cap, the distinction matters most when selling to customers in smaller cities or unincorporated areas where combined rates are lower.
Not sure what else your Texas LLC owes?
Most business owners are surprised by how many filing obligations they have. Ortholo's free compliance checker shows you everything you owe, when it's due, and what happens if you miss it — personalized to your entity.
This guide is for informational purposes only and does not constitute legal or tax advice. Consult a qualified professional for advice specific to your situation.
Last verified: 2026-05-15
Sources: Texas Comptroller — Sales Tax · Sales Tax Permit · Texas Sales Tax Rate Locator