Home/Sales Tax/TX

Texas

Sales Tax Rules

6.25%
State Rate
8.25%
Max Combined
Taxable
SaaS
$500k
Nexus Threshold

Texas imposes a state sales tax rate of 6.25%, with a maximum combined rate (state plus local) of 8.25% when local taxes are added. Economic nexus is triggered at $500,000 in sales — meaning out-of-state businesses that exceed this threshold must collect and remit Texas sales tax. SaaS and digital software products are taxable in Texas. Groceries are exempt from state sales tax.

Full Tax Details

State Sales Tax Rate6.25%
Max Combined Rate8.25%
Economic Nexus (Sales)$500,000
Economic Nexus (Transactions)N/A
SaaS TaxableYes
Digital Goods TaxableYes
Groceries ExemptYes
Clothing ExemptNo
Filing FrequencyMonthly, Quarterly, or Annual
Online FilingAvailable

SaaS Tax Details

Taxable as a data processing service; 20% of the charge is exempt.

Grocery Details

Most food for home consumption is exempt; excludes candy and soft drinks.

How Texas Compares to Neighboring States

StateState RateMax CombinedSaaSGroceries
Texas ★6.25%8.25%TaxableExempt
Arkansas6.5%11.625%ExemptExempt
Louisiana5%11.45%TaxableExempt
New Mexico4.875%9.063%TaxableExempt
Oklahoma4.5%11.5%ExemptExempt

Frequently Asked Questions — Texas Sales Tax

What is the sales tax rate in Texas?

Texas's state sales tax rate is 6.25%. When local taxes are added, the maximum combined rate can reach 8.25%. The actual rate you pay depends on the county and city where the purchase is made.

What is the economic nexus threshold in Texas?

Texas requires out-of-state businesses to collect sales tax once they exceed $500,000 in sales in a calendar year. Once nexus is established, the business must register, collect, and remit Texas sales tax.

Is SaaS taxable in Texas?

Yes. Texas considers SaaS (Software as a Service) taxable. Businesses selling SaaS products to Texas customers must collect sales tax. Taxable as a data processing service; 20% of the charge is exempt.

Are groceries taxed in Texas?

Groceries are generally exempt from sales tax in Texas. Most food for home consumption is exempt; excludes candy and soft drinks.

Are digital goods taxable in Texas?

Yes. Texas taxes digital goods including downloaded software, music, movies, and e-books. Businesses selling digital products to Texas customers should collect sales tax.

Are clothing items exempt from sales tax in Texas?

Clothing is subject to sales tax in Texas at the standard state rate.

How often do I need to file sales tax in Texas?

Texas requires sales tax filing on a Monthly, Quarterly, or Annual. Online filing is available through the official Department of Revenue portal.

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Official Source

Texas Department of Revenue

View Official Site →

Last verified: 2026-03-25 · Always confirm current rates with your tax advisor before filing.