The Magnolia, Texas sales tax rate is 8.25%, the maximum combined rate allowed anywhere in the state. That total is 6.25% collected by the State of Texas and 2.00% collected locally by the City of Magnolia, with a portion of the local share funding the city’s economic development corporations.1City of Magnolia. Tax Rate Information It applies to most retail purchases and many services inside city limits.
How the Rate Breaks Down
Texas imposes a 6.25% statewide sales tax on retail sales of taxable goods and services. Cities can add local sales tax in one-eighth-percent increments up to a combined local cap of 2%.2State of Texas. Texas Code 321.103 – Sales Tax Magnolia uses the full 2%. Within that, 0.50% is earmarked for economic development through the city’s 4A Economic Development Corporation and 4B Community Development Corporation.1City of Magnolia. Tax Rate Information
Montgomery County does not add a separate county sales tax, so the combined rate in Magnolia stays at 8.25%. Because the city already sits at the 2% local cap, no additional special-purpose district can layer another sales tax on top.
What You Pay Tax On
Most physical items you buy in Magnolia are taxed at the full 8.25%: clothing, electronics, furniture, appliances, and other tangible goods. The surprises tend to show up on the services side, because Texas taxes more services than many people expect.
Telecommunications services are taxed by both the state and the city when the call or service occurs between Texas locations. The definition covers local phone service, long-distance calls originating and billed within Texas, mobile phone service, paging, and fax service.3Texas Comptroller of Public Accounts. Sales Tax on Telecommunications Services Interstate long-distance calls originating from a Texas number are subject to state tax only. Cable television, satellite TV, streaming video, and video-on-demand are also taxable, as are credit reporting services.4Texas Comptroller of Public Accounts. Taxable Services
What’s Exempt
Several everyday categories are completely free of sales tax. These exemptions are set at the state level and apply the same way in Magnolia as anywhere else in Texas.
Groceries
Food products for human consumption are exempt. That covers staples like bread, meat, dairy, eggs, fruits, vegetables, and cereals. The exemption does not reach prepared food sold ready to eat by restaurants, delis, or food trucks, and it does not cover soft drinks, candy, or ice. Snack items sold through vending machines or in single-serving portions are taxable too.5State of Texas. Texas Tax Code 151.314 – Food and Food Products
Prescriptions and Medical Supplies
Prescription medications dispensed by a licensed practitioner are exempt, along with insulin, over-the-counter drugs that carry a “Drug Facts” panel, and hypodermic needles. The exemption also covers prosthetic devices, hearing aids, braces, corrective lenses, wound care dressings, hospital beds, and blood glucose test strips.6State of Texas. Texas Tax Code 151.313 – Health Care Supplies
Agriculture and Manufacturing
Farmers and ranchers can buy feed, seed, livestock, and veterinary medications without paying sales tax, and the same goes for equipment used exclusively on a commercial farm or ranch. Claiming the break at the register takes a current Ag/Timber registration number and a completed exemption certificate.7Texas Comptroller of Public Accounts. Agricultural and Timber Exemptions Manufacturers can claim exemptions on raw materials that become part of a finished product, chemicals that cause a physical or chemical change in production, and equipment used directly in manufacturing, along with packaging supplies, pollution control equipment, and required safety apparel.8Texas Comptroller of Public Accounts. Manufacturing Exemptions
Tax-Free Weekends
Texas runs at least two sales tax holidays a year, and both apply in Magnolia.
The back-to-school holiday in 2026 runs Friday, August 7 through Sunday, August 9. Most clothing, footwear, school supplies, and backpacks priced under $100 per item are tax-free during that weekend.9Texas Comptroller of Public Accounts. Sales Tax Holiday Items that don’t qualify include jewelry, handbags, watches, athletic gear designed primarily for sports, and anything priced at $100 or more. Student backpacks qualify as long as the price is under $100, with a limit of ten per purchase. Layaway and online orders count if you pay during the holiday window, even if delivery arrives later.
The ENERGY STAR holiday in 2026 runs May 23 through May 25. Qualifying energy-efficient appliances are tax-free that weekend, including air conditioners priced at $6,000 or less, refrigerators priced at $2,000 or less, ceiling fans, clothes washers, dishwashers, dehumidifiers, and light bulbs.10Texas Comptroller of Public Accounts. ENERGY STAR Sales Tax Holiday
Shopping Just Outside City Limits
If you cross into an unincorporated area of Montgomery County, the combined rate may be lower. Only the 6.25% state portion and any applicable special district taxes would apply, since the City of Magnolia’s 2% stops at its boundary.