Texas Sales Tax Rate 2026: 6.25% State, 8.20% Avg. Combined
Texas’s state sales tax rate is 6.25%. Cities, counties and special districts add their own rates on top, so the total depends on where the order is delivered. The average combined state and local rate is 8.20%. Local rates are capped at 2%, so the combined rate is never more than 8.25%.
| Texas sales tax (2026) | Rate |
|---|---|
| State rate | 6.25% |
| Average local rate | 1.95% |
| Average combined rate | 8.20% |
Rates as of July 1, 2026, from the Tax Foundation. The exact rate on an order depends on the delivery address. Look up the exact rate for any Texas ZIP code with our sales tax calculator.
Texas is one of three states with a $500,000 economic nexus threshold and is notable for a unique SaaS taxability rule: Texas taxes SaaS as a “data processing service” and exempts 20% of the charge, so tax applies to 80% of the price — an effective state rate of 5% rather than the full 6.25%. Understanding this rule is essential for any SaaS business with Texas customers.
Quick Reference
Section titled “Quick Reference”| Criterion | Detail |
|---|---|
| State Rate | 6.25% |
| Economic Nexus Threshold | $500,000 gross sales (rolling 12 months) |
| Transaction Threshold | None |
| Digital Goods / SaaS | Taxable (SaaS on 80% of the price — 20% exempt) |
| Typical Filing Frequency | Monthly |
| SST Member | No |
| Registration Portal | comptroller.texas.gov |
Economic Nexus
Section titled “Economic Nexus”For informational purposes only · Not legal or tax advice · Consult a licensed tax professional · Rules as of 2026
Texas’s economic nexus threshold is $500,000 in gross sales into Texas in the preceding 12 calendar months — one of only three states at this level (alongside California and New York). Once exceeded, registration and collection are required.
Marketplace-facilitated sales count toward the threshold. There is no transaction count alternative threshold.
The $500,000 threshold means smaller sellers often do not create Texas nexus even when they have obligations in many other states. This is a meaningful difference in compliance prioritization.
Tax Rate and Product Taxability
Section titled “Tax Rate and Product Taxability”Texas sales tax calculator
Every rate that applies at a US ZIP code, worked out on your order.
Sales tax · Texas 77002
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Collecting sales tax in Texas and beyond?
GoodVat tracks your economic nexus in every state, registers you, charges the right rate on every order and files your returns.
Calculation only, not legal or tax advice. Verify with the state Department of Revenue before you file. State averages: Tax Foundation, July 1, 2026.
Texas’s state rate is 6.25%. Local jurisdictions add up to 2% additional:
- State: 6.25%
- City: up to 2% (cities set their own rates up to the 2% cap)
- Combined maximum: 8.25%
- Combined in Houston: 8.25%
- Combined in Dallas: 8.25%
- Combined in Austin: 8.25%
- Combined in San Antonio: 8.25%
Most major Texas cities run at the combined 8.25% maximum.
Texas uses destination-based sourcing for remote sellers.
Product Categories
Section titled “Product Categories”Taxable: Tangible personal property, SaaS (with the 20% exemption — see below), most retail goods.
Exempt: Prescription drugs, most groceries (food for home consumption is exempt), qualifying agricultural inputs, manufacturing equipment and supplies.
Grocery exemption: Texas broadly exempts most food items for home consumption from sales tax. Prepared food, candy, and certain snacks remain taxable.
Digital Goods and SaaS — The 20% Exemption
Section titled “Digital Goods and SaaS — The 20% Exemption”Texas has one of the most distinctive digital goods rules in the US:
Texas taxes SaaS — but as a “data processing service,” and 20% of the charge is exempt. Tax applies to the other 80%.
The calculation:
- Standard SaaS invoice: $1,000/month
- Exempt portion: $1,000 × 20% = $200
- Taxable portion: $1,000 × 80% = $800
- Tax owed: $800 × 8.25% = $66.00
- Effective rate on full charge: 6.6% (using combined 8.25%) or 5% (using state 6.25% only)
This rule exists because the Texas Comptroller classifies SaaS as a “data processing service,” and Texas law exempts 80% of data processing service charges from sales tax.
What this means practically:
- You must collect and remit tax on Texas SaaS sales — you cannot simply not collect
- You collect only on the taxable 80%, not the full invoice amount
- Configure your tax engine or billing platform to apply the 80% taxable base correctly (not 100%)
- Tax platforms like Stripe Tax apply the 20% exemption automatically when you assign a SaaS product tax code — verify your configuration
Other digital goods in Texas:
- Downloaded software — taxable at 100% of the price (the 20% exemption doesn’t apply)
- Digital content (music, movies, ebooks) — taxable at 100%
- Internet access services — generally exempt (federal Internet Tax Freedom Act applies)
Registration
Section titled “Registration”Texas is not an SST member. Register directly with the Texas Comptroller.
- Go to the Texas Comptroller: comptroller.texas.gov
- Access the eSystems portal
- Register for a Texas Sales and Use Tax Permit
- Provide EIN and business details
- You will receive a Texas Taxpayer Number and Sales Tax Permit
Registration is free.
Foreign Sellers
Section titled “Foreign Sellers”Texas accepts foreign business registrations. A US EIN is required. Texas does not require a registered agent specifically for sales tax registration.
Filing Frequency and Deadlines
Section titled “Filing Frequency and Deadlines”The Comptroller assigns your filing frequency — monthly, quarterly, or yearly — based on how much tax you collect, and tells you by letter after your permit is approved. Most remote sellers with meaningful Texas sales file monthly.
| Filing Frequency | Due Date |
|---|---|
| Monthly | 20th of the following month |
| Quarterly | April 20, July 20, October 20, January 20 |
| Yearly | January 20 |
Returns are filed through the Texas Comptroller eSystems portal. Texas requires electronic filing for most registered sellers.
Compliance Notes
Section titled “Compliance Notes”The 20% SaaS exemption is unique: No other major US state has this exact rule. Sellers who tax 100% of SaaS charges are overcollecting; sellers who apply 0% are non-compliant. The taxable base is 80% of the service price.
Stripe Tax and the 20% exemption: Stripe Tax handles the Texas SaaS 20% exemption automatically when you assign the correct SaaS product tax code. If you use a different billing platform, verify that it handles this correctly — most generic tax engines require specific configuration for Texas SaaS.
$500,000 threshold: Texas joins California and New York with a five-times-higher threshold. Many sellers who have nexus in 30+ other states may not have Texas nexus yet.
Not SST: Texas is not an SST member. Multi-state SST registration does not cover Texas.
Amazon FBA: Amazon operates multiple major fulfillment centers in Texas. FBA inventory creates physical nexus from dollar one — the $500,000 threshold does not apply.
High-value market: Texas is the second-largest US state by GDP. Once you cross $500,000, the tax exposure (5% effective state rate for SaaS) on a large revenue base is meaningful.
Texas Sales Tax FAQ
Section titled “Texas Sales Tax FAQ”What is the sales tax rate in Texas?
Section titled “What is the sales tax rate in Texas?”Texas’s state sales tax rate is 6.25%. Local taxes are added on top, and the average combined state and local rate is 8.20% (Tax Foundation, July 2026). The exact rate depends on the delivery address. Local rates are capped at 2%, so the combined rate is never more than 8.25%.
What is the Texas economic nexus threshold?
Section titled “What is the Texas economic nexus threshold?”Remote sellers must register and collect Texas sales tax once they make more than $500,000 in gross sales into the state (rolling 12 months). There is no separate transaction-count threshold.
Is SaaS taxable in Texas?
Section titled “Is SaaS taxable in Texas?”Yes, partly. Texas treats SaaS as a data processing service and exempts 20% of the charge, so tax applies to 80% of the price. At the 6.25% state rate that works out to an effective 5%, before local tax.
How often do you file sales tax in Texas?
Section titled “How often do you file sales tax in Texas?”Most sellers file monthly. Texas assigns your filing frequency when you register, based on how much tax you collect, so lower-volume sellers may file less often.