Texas State Tax Guide

Texas state tax rates and rules for income, sales, property, fuel, cigarette and other taxes that impact residents.

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Texas state tax: Overview

Texas state tax has pros and cons. The statewide sales tax rate of 6.25% is a bit high, and localities can add 2%. Property taxes in Texas are also on the high end but were recently lowered for many.

In the News: Homeowners in the Lone Star State might have noticed lower property tax bills this year, thanks to a Texas property tax relief package (Proposition 4) that became effective last year. After many months of disagreement, the compromise between Texas lawmakers includes an increased homestead exemption and property tax cuts for businesses and homeowners. Texans approved the tax package last November.

In a statement released after lawmakers reached the deal, Texas Gov. Greg Abbott referred to the more than $18 billion in tax cuts as a "comprehensive, long-lasting solution to increasingly burdensome property tax bills."

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For more information, see Texas Property Tax Relief: Details to Know.

[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.] 

Texas income taxes

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Texas is one of nine U.S. states with no income tax.

Texas sales tax

Texas has a 6.25% state sales tax rate, but not all items are taxable.

  • Groceries are tax-exempt.
  • Prescription drugs are tax-exempt.
  • Over-the-counter medications are tax-exempt.
  • Women's feminine hygiene products and infant diapers are tax-exempt.

How much are property taxes in Texas?

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In Texas, the average effective property tax rate is 1.63%. A Texas property tax relief measure enacted last year lowered property taxes for many Texans, partially due to an increase to the state's homestead exemption. 

Texas Property Tax Breaks for Retirees

Homestead Exemption: Homeowners age 65 or older may be eligible for a special homestead exemption for their principal residence. For qualified homeowners, $10,000 of the property's assessed value is exempt from school taxes (in addition to the regular homestead exemption of $100,000). Other taxing units may also offer an exemption of at least $3,000 to qualified homeowners.

Texas gas taxes

The Texas gasoline tax is $0.20 per gallon.

(Note: Last year, Texas imposes a "tax" on electric vehicles registered in the state.)

Texas taxes on alcohol and tobacco

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Cigarettes$1.41 per pack
Snuff$1.22 per ounce
Chewing tobacco$1.22 per ounce
Cigars$0.01 to $0.15 per cigar
Beer$0.20 per gallon
Wine$0.20 per gallon
Sparkling wine$0.516 per gallon
Liquor$2.40 per gallon

Texas estate and inheritance taxes

Texas has no inheritance or estate tax.

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Katelyn Washington
Former Tax Writer

Katelyn has more than 6 years of experience working in tax and finance. While she specialized in tax content while working at Kiplinger from 2023 to 2024, Katelyn has also written for digital publications on topics including insurance, retirement, and financial planning and had financial advice commissioned by national print publications. She believes knowledge is the key to success and enjoys providing content that educates and informs.