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 an additional 2%. Property taxes in Texas are also on the high end but are still lower than in some other states.

Texas residents might find paying the sales and property taxes worth it since they don't need to pay income tax. Gasoline prices in the Lone Star State are fairly low.

[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.] 

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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.

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How much are property taxes in Texas?

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In Texas, the average effective property tax rate is 1.74%, which is one of the highest in the U.S. However, some homeowners qualify for property tax breaks.

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 $40,000). Other taxing units may also offer an exemption of at least $3,000 to qualified homeowners.

Property Tax Freeze: School-district taxes are frozen when a residence's owner turns 65. Counties, cities, towns and junior-college districts can also establish a tax freeze.

Property Tax Deferral: A homeowner who is 65 or older may qualify to defer their property taxes. The deferment period doesn't expire until the 181st day after a qualifying event occurs. 

  • Moving from the primary residence is a qualifying event.
  • Death of the owner is a qualifying event.

Texas motor vehicle and gas taxes

Motor vehicle purchases in Texas are taxable.

The Texas gasoline tax is $0.20 per gallon.

As of September 1, 2023, 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
MarijuanaN/A (not permitted for recreational use)

Texas estate and inheritance taxes

Texas has no inheritance or estate tax.

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Katelyn Washington
Tax Writer

Katelyn has more than 6 years’ experience working in tax and finance. While she specializes in tax content, Katelyn has also written for digital publications on topics including insurance, retirement and financial planning and has had financial advice commissioned by national print publications. She believes that knowledge is the key to success and enjoys helping others reach their goals by providing content that educates and informs.