2025 Guide to Texas Sales Tax

Sales tax rates in Texas can vary, with a statewide sales tax of 6.25%. Cities and special districts can also impose sales tax, which can cause overall sales tax rates to fluctuate in the state.

Understanding Texas sales tax compliance protects your business from penalties while ensuring you collect the correct amount from customers. With economic nexus thresholds of $500,000 in annual sales, even remote sellers must navigate Texas tax obligations. Our managed compliance solution handles every aspect of Texas sales tax, allowing you to focus on growing your business instead of managing complex tax requirements.

Understanding Texas Sales Tax Rates

Texas operates one of the most complex sales tax systems in the United States, with rates varying significantly across more than 450 special-purpose districts. The state imposes a base sales tax rate of 6.25%, while local jurisdictions and special districts can impose additional taxes.

Cities like Carrollton in Dallas County reach the maximum rate of 8.5% through a combination of state, county, and city taxes. This complexity means businesses must calculate precise rates for each customer location to maintain compliance.

Common Texas Sales Tax Rates by Location

Here are some examples of sales tax being charged in different locations in Texas:

Major Cities:

• Austin: 7.75% to 10.25% 
• Houston: 7.5% to 10%
• Dallas: 7.775% to 8.75%
• San Antonio: 8.125% to 9.625%

How to Calculate Texas Sales Tax

Texas sales tax calculation requires adding multiple components:

1. State tax: 6.25% (applies to all taxable sales)
2. County tax: 0% to 2% (varies by county)
3. City tax: 0% to 2% (varies by municipality)
4. District tax: 0% to 2% (varies by district)

Take Cooper in Delta County, Texas, for instance. The sales tax rate in Cooper is 7.25%. 

This rate includes the combination of:

• Texas state sales tax: 6.25%
• Delta County sales tax: 0.5%
• District tax: 0.5%

How Texas Sales Tax Works

Texas requires businesses to collect sales tax when they have established nexus in the state and sell taxable products or services. The Texas Tax Code Section 151.024 defines specific requirements for tax collection obligations.

What Creates Sales Tax Nexus in Texas?

Texas recognizes several nexus triggers that create tax collection obligations:

Economic Nexus

Businesses exceeding $500,000 in Texas sales during the previous or current calendar year must register and collect Texas sales tax. This threshold applies to gross revenue from all taxable sales, not just individual transactions.

Physical Nexus

Any physical presence in Texas creates nexus, including:

• Retail stores or offices
• Warehouses or distribution centers
• Employees working in the state
• Inventory stored in Texas fulfillment centers

Affiliate Nexus

Out-of-state sellers receiving substantial referrals from Texas-based businesses may trigger nexus obligations.

How to Collect Texas Sales Tax

Texas sales tax collection requires understanding origin-based sourcing for intrastate sales and destination-based sourcing for interstate sales. The state's complex system means businesses must calculate precise rates for each transaction while maintaining compliance with marketplace facilitator laws and shipping charge requirements.

Successfully collecting Texas sales tax protects your business from penalties while ensuring accurate customer charges.

How to Collect Sales Tax on Intrastate Texas Sales

A sale is considered intrastate if it ships from an origin in Texas to a buyer's address in Texas. 

Texas is an “origin-based” sales tax sourcing state. This means that if you make a sale originating in Texas and the buyer’s ship-to address is also in Texas, you would charge the sales tax rate at the sale’s origin point. 

For example, your business is in Bexar County, Texas, and you make a taxable sale to a buyer in Harris, Texas. Then, you should charge the buyer the sales tax rate at your Bexar County location.

How to Collect Sales Tax on Interstate Texas Sales

A sale is considered “interstate” if the item ships from outside Texas and the seller isn’t otherwise “engaged in a business” in the state.  

For sales that don’t originate in Texas, you’d generally charge the sales tax rate at your buyer’s location. For instance, if your business is located in Idaho Falls, Idaho, and you make a taxable sale to a buyer in Bartonville, Denton County, Texas, you may have to charge the buyer the Alpine sales tax rate.

Marketplace Facilitator Requirements

Texas marketplace facilitator law requires platforms like Amazon and Walmart to collect sales tax on behalf of third-party sellers. However, if you have nexus through other channels, you must still collect tax on non-marketplace sales.

Texas Shipping Charges

Texas requires the collection of sales tax on shipping charges. Unlike some states that exempt shipping, Texas considers delivery charges part of the taxable transaction.

Tax Collection Best Practices

1. Register for proper permits before making your first Texas sale
2. Calculate precise rates for each customer location
3. Maintain detailed records of all transactions and tax collected
4. File returns on time to avoid penalties and interest

Taxable Products in Texas

Most tangible personal property and services, like clothing and furniture, are subject to sales tax in Texas.

However, like some other states, Texas avoids imposing taxes on basic necessities like over-the-counter medications and water. 

Let’s take a closer look at how items are taxed in Texas: 

Are Groceries Taxable in Texas? 

No, groceries are not taxable in the state of Texas.

Is Clothing Taxable in Texas?

Yes, clothing is a taxable item in Texas. 

Are Digital Products Taxable in Texas?

Digital products are taxable in Texas if their tangible equivalent is also taxable. 

For instance, this applies to things like an eBook version of a book that will also be sold in hardback at a bookstore. Or the electronic version of a movie that would also be sold on a Blu-ray disc. 

Is Software-as-a-Service (SaaS) Taxable in Texas?

Texas taxes SaaS as a data processing service, and it is subject to an 80% sales tax on the price of the service. Twenty percent of the price of these services is eligible for a Texas sales tax exemption.

Are Services Taxable in Texas? 

Taxable services in Texas include:

• Amusement services
• Cable television services and bundled cable services
• Credit reporting services
• Data processing services
• Debt collection services
• Information services
• Insurance services
• Internet access services
• Laundry, cleaning, and garment services
• Motor vehicle parking and storage services
• Nonresidential real property repair, restoration, or remodeling services
• Personal property maintenance, remodeling, or repair services
• Personal services
• Real property services
• Security services
• Telecommunications services
• Telephone answering services
• Utility transmission and distribution services
• Taxable labor – photographers, draftsmen, artists, tailors, etc.

Zamp Tip

You can apply for a Texas sales tax exemption certificate to buy a taxable item tax-free for resale, rent, or lease-out purposes.

Tax-exempt Items

Tax-exempt items in Texas are:

• Baby products like baby food (canned, packaged, etc.) and milk (canned, dry, etc.)
• Bakery items (non-taxable when sold at a grocery and convenience store without eating utensils or heated). For example, items like bagels, cookies, and strudels. This includes baking supplies like almond paste, marzipan, and baking chocolate (blocks and chips).
• Condiments and spices such as catsup and herbs.
• Dairy products like butter, milk, and milk substitutes (canned and dry).
• Food produce like eggs, canned fruits and vegetables (canned, dried, and frozen) and snacks such as breakfast bars and frozen yogurt unless sold in individual-sized portions. 
• Beverages like coffee, water, and fruit and vegetable juices (more than 50 percent fruit or vegetable juice, canned, bottled, or frozen).
• Grains and pasta like pasta and rice.
• Meat, poultry, and fish like canned, dried, and deli meats.
• Nutritional supplements including herbal and mineral products and vitamins. According to the FDA regulations, these products should either fulfill the criteria for dietary supplements or be labeled with a “Supplement Facts” panel.
• Over-the-counter drugs and medicines (when required by the FDA to be labeled with a Drug Facts panel), like acne and allergy treatment products. It also includes wound care items such as adhesive bandages (including strip adhesive bandages, large adhesive bandages, and butterfly closures), corn cushions, and liquid bandage products.

But to collect these taxes, you must first have a sales tax license. Let’s find out how you can get one.

How to Register for a Seller’s Permit in Texas

Texas requires all businesses with nexus to obtain a sales tax permit before making their first taxable sale in the state. The registration process involves submitting business information, ownership details, and estimated tax liability through the Texas Comptroller's online system.

Proper registration protects your business from operating without required permits while establishing your compliance foundation. Many businesses struggle with timing their registration correctly or providing incomplete information that delays approval. 

Our registration assistance ensures you complete the process accurately and efficiently, so you can start selling in Texas with confidence from day one.

Obtaining a Texas Sales Tax Permit

All businesses with nexus must register through the Texas Tax Comptroller website. The registration process requires:

• Business information and structure details
• Ownership information
• Estimated monthly tax liability
• Banking information for electronic payments

Temporary Sellers in Texas

Even temporary sellers must obtain permits before conducting business in Texas. Seasonal businesses and trade show vendors need permits for any sales activity, regardless of duration.

Texas Filing and Payment Requirements

Texas assigns filing frequencies and payment methods based on your tax liability, with specific deadlines falling on the 20th of the month following each taxable period. Higher-volume sellers face monthly obligations and electronic filing requirements, while smaller businesses may qualify for quarterly or annual schedules.

Meeting Texas filing deadlines protects your business from penalties that start at 5% and compound quickly with additional fees and interest charges. The state's electronic filing thresholds and multiple payment systems create complexity that increases as your business grows. Our managed filing service handles all deadlines, electronic requirements, and payment processing automatically, so you never miss a due date or face unexpected penalties.

Texas Filing Frequencies

Texas assigns filing schedules based on tax liability:

• Monthly: Higher-volume sellers
• Quarterly: Medium-volume sellers
• Annual: Low-volume sellers

Payment Methods for Texas Filers

You can pay:

• Online through Texas Comptroller website
• Electronic funds transfer (EFT) for large taxpayers
• TEXNET for highest-volume taxpayers
• Mail (limited circumstances)

Texas Sales Tax Due Dates 2025

Texas sales tax returns are due on specific dates throughout 2025. Due dates falling on weekends or holidays extend to the following business day.

Texas Monthly Filing Due Dates

Taxable Period	Filing Due Date
January 2025	February 20, 2025
February 2025	March 20, 2025
March 2025	April 21, 2025
April 2025	May 20, 2025
May 2025	June 20, 2025
June 2025	July 21, 2025
July 2025	August 20, 2025
August 2025	September 22, 2025
September 2025	October 20, 2025
October 2025	November 20, 2025
November 2025	December 22, 2025
December 2025	January 20, 2026

Texas Quarterly Filing Due Dates

Taxable Period	Filing Due Date
Q1 (Jan-March) 2025	April 21, 2025
Q2 (Apr-June) 2025	July 21, 2025
Q3 (July-Sept) 2025	October 20, 2025
Q4 (Oct-Dec) 2025	January 20, 2026

Texas Annual Sales Tax Filing Due Date

Taxable Period	Filing Due Date
2025	January 20, 2026

Common Texas Sales Tax Compliance Challenges

Texas sales tax compliance presents unique difficulties that intensify as businesses grow across multiple jurisdictions and sales channels. From managing rate variations to tracking frequent regulatory changes, even experienced businesses struggle with the administrative burden and penalty risks that come with manual compliance management.

Understanding these challenges helps you recognize when professional management becomes essential for protecting your business. 

Texas Rate Calculation Complexity

With hundreds of taxing jurisdictions, determining correct rates requires sophisticated tax software or professional management. Rate changes occur frequently, making manual tracking nearly impossible.

Texas Filing Deadline Management

Texas uses the 20th of the month following the taxable period, with adjustments for weekends and holidays. Missing deadlines triggers immediate penalties and interest charges.

Record Keeping Requirements

Texas requires four years of detailed records for all sales transactions, tax collected, and filing history. During audits, inadequate records result in estimated assessments and additional penalties.

Multi-State Sales Tax Compliance

Businesses operating across multiple states must navigate varying nexus rules, filing requirements, and rate structures. Texas complexity compounds when combined with other state obligations.

Eliminate Texas Sales Tax Compliance Headaches

Managing Texas sales tax compliance consumes valuable time and resources that could be invested in growing your business. The complex multi-jurisdictional system, frequent rate changes, and detailed filing requirements create ongoing administrative burdens that increase with business growth.

Zamp’s managed sales tax solution combines advanced automation with expert oversight, handling every aspect of Texas compliance so you can focus on your core operations. From precise rate calculations to timely filing and remittance, we ensure accuracy while you maintain complete peace of mind.

Ready to eliminate sales tax stress? Contact our team of compliance experts today and discover how we make Texas sales tax compliance effortless.