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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallTexas tax bills depend on what you buy or own, who is liable, and the address where a transaction occurs. Texas has no state property tax: local taxing units set property-tax rates after appraisal districts value property as of January 1. The state sales-and-use tax rate is 6.25%, while local jurisdictions can add up to 2%, producing a maximum combined rate of 8.25%.
Businesses may owe franchise tax, and separate taxes apply to vehicles, fuel, hotel rooms, alcohol, oil and gas, insurance, tobacco, utilities and other activities. Use the Texas Comptroller’s current guidance and its Sales Tax Rate Locator for the exact jurisdiction, transaction type and effective date.
Texas taxes at a glance
| Tax | Who or what is taxed | Rate or rule | Main administrator |
|---|---|---|---|
| Sales and use tax | Taxable tangible personal property and selected services; use tax covers taxable items bought without Texas tax and then stored, used or consumed in Texas | 6.25% state rate; local jurisdictions may add up to 2%, for an 8.25% maximum combined rate | Texas Comptroller and local taxing jurisdictions |
| Property tax | Real and personal property | No state property tax; local taxing units set rates based on locally appraised value | County appraisal districts and local taxing units |
| Franchise tax | Taxable entities formed or organized in Texas or doing business there | For 2026–2027 reports: $2.65 million no-tax-due threshold; 0.375% retail/wholesale rate; 0.75% other rate; 0.331% EZ computation rate for qualifying entities with up to $20 million total revenue | Texas Comptroller |
| Motor-vehicle tax | Vehicle sales and short-term rentals | 6.25% of sales price less trade-in; no local motor-vehicle tax. Rentals of 30 days or less are taxed at 10%; rentals of 31–180 days at 6.25% | Texas Comptroller and county tax offices |
| Motor-fuel tax | Gasoline, diesel and compressed or liquefied natural gas | 2025 Comptroller rates: 20 cents per gallon for gasoline, 20 cents for diesel and 15 cents for compressed/liquefied natural gas | Texas Comptroller |
| Hotel occupancy tax | Paid lodging | 6% state rate; state, local, sports and community-venue taxes together cannot exceed 17% | Texas Comptroller and local taxing authorities |
| Alcohol taxes | Liquor, malt beverages, wine and mixed beverages | Rates vary by product and transaction (see below) | Texas Comptroller and Texas Alcoholic Beverage Commission |
| Oil and gas production tax | Oil, natural gas and condensate production | Natural gas 7.5% of market value; condensate 4.6%; oil 4.6% | Texas Comptroller |
Other Texas taxes include insurance-premium, cigarette, cigar and tobacco, boat and boat-motor, manufactured-housing, rental, utility, telecommunications and local special-purpose taxes. Their rates, exemptions and filing rules depend on the category and should be checked in current Comptroller guidance.
Sales and use tax
How the combined rate works
The state rate is 6.25% on taxable tangible personal property and selected services. Cities, counties, transit authorities and special-purpose districts may add local sales and use taxes of up to 2%. Therefore, the highest possible combined rate is 8.25%, but the rate at a particular address can be lower.
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How to calculate a purchase
- Determine whether the item or service is taxable.
- Identify the location whose rate applies, generally using the delivery or transaction address.
- Look up the address in the Comptroller’s Sales Tax Rate Locator and confirm the effective date.
- Multiply the taxable price by the combined rate. For example, a $1,000 taxable purchase at 8.25% produces $82.50 in sales tax and a $1,082.50 total before any other charge.
When use tax applies
Use tax is the complementary, generally nonrecurring tax on taxable property or taxable services purchased without Texas tax and then stored, used or consumed in Texas. It commonly matters when an out-of-state seller does not collect Texas tax. The purchaser remains responsible for reporting and paying the use tax when required.
Property tax: local, not state
Texas has no state property tax. County appraisal districts determine property values as of January 1. School districts, counties, cities, junior colleges and special districts then adopt budgets and set their own rates. A property’s bill can therefore contain several separate local taxing-unit rates.
How to check a property bill
- Find the county appraisal district responsible for the property’s location.
- Review the January 1 appraised value and any exemption shown on the appraisal record.
- List every taxing unit on the bill, including the school district, county, city and special districts.
- Confirm each unit’s current rate and multiply the taxable value by the applicable combined local rates.
Because values, exemptions and rates are local, a statewide percentage cannot produce a reliable property-tax estimate.
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Texas franchise tax for businesses
Franchise tax is a business-privilege tax on taxable entities formed or organized in Texas or doing business in Texas. The applicable threshold and computation depend on the report year and the entity’s method.
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- No-tax-due threshold: $2,650,000.
- Retail or wholesale rate: 0.375%.
- Other businesses rate: 0.75%.
- EZ computation: 0.331% for qualifying entities with up to $20 million in total revenue.
Before filing, verify whether the entity qualifies for the no-tax-due threshold or EZ computation, which revenue base applies, and the Comptroller’s filing deadline for the specific report year. A threshold is not a universal exemption from every Texas tax or filing obligation.
Vehicle and fuel taxes
Buying a vehicle
Texas motor-vehicle tax is 6.25% of the vehicle’s sales price after subtracting the value of a trade-in. There is no local motor-vehicle tax. The taxable base is the transaction price after the trade-in adjustment, not a separately selected local rate.
Renting a vehicle
Vehicle rentals of 30 days or less are subject to a 10% rental tax. Rentals lasting 31 through 180 days are taxed at 6.25%.
Fuel at the pump
The Texas Comptroller’s 2025 rates are 20 cents per gallon for gasoline, 20 cents per gallon for diesel and 15 cents per gallon for compressed or liquefied natural gas. These are per-gallon fuel taxes, distinct from sales tax calculations.
Hotel occupancy tax
The state hotel occupancy tax is 6% of the lodging price. Local hotel taxes, sports taxes and community-venue taxes can also apply, but the combined state and applicable local rates cannot exceed 17%.
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To estimate a room bill, identify the taxable room charge, apply the state rate and then check the hotel’s city, county and venue-related rates. The maximum is a legal ceiling, not the rate every hotel charges.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Alcohol taxes
Texas applies different excise and transaction taxes by beverage type:
- Liquor: $2.40 per gallon (2025 Comptroller rate).
- Malt beverage: $6 per 31-gallon barrel, equal to 19.4 cents per gallon (2025 rate).
- Wine: 20.4 cents per gallon at 14% alcohol by volume or less; 40.8 cents above 14%; and 51.6 cents per gallon for sparkling wine (2025 rates).
- Mixed beverages: 6.7% mixed-beverage gross-receipts tax and 8.25% mixed-beverage sales tax.
Licensing and reporting responsibilities can involve both the Comptroller and the Texas Alcoholic Beverage Commission. A retailer, permittee and consumer may face different charges, so classify the transaction before calculating it.
Oil and gas production taxes
Texas taxes production based on market value. Natural-gas production is taxed at 7.5%; condensate at 4.6%; and oil production at 4.6%. These production taxes are separate from sales tax and are generally handled through the producer’s reporting obligations.
Other Texas tax categories
Depending on your activity, you may also encounter:
- Insurance-premium taxes.
- Cigarette, cigar and other tobacco taxes.
- Boat and boat-motor tax.
- Manufactured-housing tax.
- Rental taxes.
- Utility and telecommunications-related taxes.
- Local special-purpose taxes.
Rates, exemptions, permits and filing schedules in these categories can change. Check the current Comptroller category instructions, and for alcohol-related obligations check current TABC instructions.
Quick Recap
How to determine the tax you owe
- Identify the taxpayer and activity. Decide whether you are an individual, property owner, seller, business entity, permittee, landlord or producer.
- Identify the tax base. It may be a sale price, gross receipts, taxable margin, appraised value, gallons, market value or room charge.
- Separate state and local layers. Some taxes are state-only; others combine state and local rates.
- Check the location. Use the Comptroller’s Sales Tax Rate Locator for the address and effective date. For property, contact the county appraisal district and review every taxing unit.
- Confirm the period and deadline. Franchise-tax rules depend on the report year, while fuel and alcohol figures above are identified as 2025 rates.
- Verify exemptions and special rules. Do not assume an exemption for one tax applies to another.
- Keep documentation. Retain invoices, exemption certificates, trade-in records, appraisal notices and reports supporting the tax base.
Common calculation mistakes
- Using the 6.25% state sales-tax rate without adding applicable local tax.
- Assuming Texas has a statewide property-tax rate instead of separate local rates.
- Ignoring use tax on taxable out-of-state purchases.
- Applying a current franchise-tax threshold or rate to the wrong report year.
- Confusing vehicle sales tax with vehicle-rental tax.
- Using a general alcohol rate instead of the product-specific rate.
- Applying a fuel tax per dollar rather than per gallon.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
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