The sales tax rate in Laredo, Texas is 8.25%. That’s the state ceiling, and it applies to most retail purchases of goods and to a specific list of taxable services sold within the city. The rate has sat at the maximum for years because Laredo’s local taxing entities have fully used the 2% that Texas allows on top of its own 6.25%.1Texas Comptroller of Public Accounts. Sales and Use Tax
How the 8.25% Breaks Down
The number on your receipt is four separate taxes stacked together. The state collects 6.25% on every taxable sale under Texas Tax Code Section 151.051.2State of Texas. Texas Tax Code TAX 151.051 – Sales Tax Imposed The other 2% is split among local entities that each adopted their own sales tax under state authorization:3City of Laredo. Current Tax Rates
- City of Laredo: 1.00% for general municipal operations
- Webb County: 0.50%
- Mass transit (El Metro): 0.25%, in place since July 1991 to fund the public bus system4Texas Comptroller of Public Accounts. Transit Sales and Use Tax
- Sports venue: 0.25%
Those four pieces add up to exactly 2%. Texas caps total local sales tax at 2%, so no additional entity can layer anything on and the combined rate cannot exceed 8.25%.
What the Rate Applies To
The 8.25% covers most tangible personal property you’d buy in a store: clothing, electronics, furniture, appliances, and the like. Texas also taxes a defined list of services, including telecommunications, cable television, amusement services such as concert and event tickets, and data processing.5Texas Comptroller of Public Accounts. Taxable Services Professional services like legal or accounting work generally are not on that list and are not taxed.
Digital goods follow the physical rule. Under Texas Tax Code Section 151.010, buying an item in electronic form rather than on physical media doesn’t change its tax treatment, so downloaded music, e-books, and software all carry the 8.25% charge. Streaming subscriptions that deliver taxable content work the same way.
Cars are the big exception. Texas imposes a separate 6.25% motor vehicle sales tax on the sales price minus any trade-in allowance, paid through the county tax assessor-collector’s office when you title the vehicle rather than at the dealership register.6Texas Comptroller of Public Accounts. Motor Vehicle – Sales and Use Tax The local 2% does not apply to vehicle purchases.
What’s Exempt
Grocery staples are the biggest exempt category. Under Texas Tax Code Section 151.314, food products for human consumption are not taxed, which covers produce, meat, dairy, eggs, bread, cereals, and snack items like chips and granola bars.7State of Texas. Texas Tax Code TAX 151.314 – Food and Food Products The exemption does not reach prepared food sold ready to eat (restaurant meals, deli sandwiches), candy, soft drinks, or ice. Those are taxable at the full 8.25%.8Texas Comptroller of Public Accounts. Grocery and Convenience Stores
Medicines get broader protection than most shoppers assume. Prescription drugs are exempt, and so are over-the-counter medicines the FDA requires to carry a Drug Facts panel on the packaging. That makes ibuprofen, allergy medication, and cough syrup tax-free. Certain medical devices (mobility aids, corrective lenses, prosthetics, and insulin-related supplies) are also exempt.
The August Sales Tax Holiday
Each year, the Texas Comptroller designates a weekend in August as a sales tax holiday. During that period, most clothing and footwear priced under $100 per item can be purchased completely tax-free, with no state or local sales tax at all. School supplies and backpacks under $100 also qualify.9Texas Comptroller of Public Accounts. Sales Tax Holiday There’s no limit on how many qualifying items you can buy, and the exemption applies per item: a $90 pair of shoes qualifies even if your total purchase runs well over $100. The Comptroller publishes exact dates and a detailed list of qualifying items each spring.
How the Rate Is Applied to Your Purchase
Which local rate applies depends on where the seller is located, not where you live. Texas uses origin-based sourcing for local sales tax, so when you buy something from a store in Laredo, the local tax at the seller’s place of business sets the local portion.10Texas Comptroller of Public Accounts. Local Sales and Use Tax Collection – A Guide for Sellers A Laredo store fulfilling your order from its Laredo location charges the full 8.25% regardless of where the buyer lives.
Remote sellers (those with no physical location in Texas) follow a different rule. They collect local use tax based on the ship-to address, or they may elect to use a single statewide local use tax rate instead. When you order online from an out-of-state retailer that ships to a Laredo address, you’ll typically see 8.25% at checkout.
If you buy a taxable item and no Texas sales tax is charged, which still happens on some private sales and smaller out-of-state purchases, you technically owe use tax at the same 8.25% rate. Most large online retailers now collect automatically, so this comes up less often than it used to, but the obligation exists.
Deducting Laredo Sales Tax on Your Federal Return
Because Texas has no state income tax, Laredo residents who itemize can claim state and local sales tax on Schedule A instead of an income tax deduction. The IRS lets you calculate the deduction two ways: add up every receipt from the year, or use the IRS Sales Tax Deduction Calculator, which estimates your deduction from income, filing status, and ZIP code.11Internal Revenue Service. Use the Sales Tax Deduction Calculator If you made a large purchase during the year, such as a boat or major appliance, you can add the actual sales tax from that purchase on top of the calculator estimate.
The combined deduction for state and local taxes (sales tax, property tax, and other qualifying local taxes) is subject to a federal cap. Legislation passed in 2025 raised the cap for the 2026 tax year to $40,000 for most filers with modified adjusted gross income under $500,000, phasing down for higher earners. For married couples filing separately, the cap is half that amount. The limits increase by 1% annually through 2029. For most Laredo residents, the higher cap means a greater share of your sales and property tax payments will actually be deductible than under the previous $10,000 limit.