The sales tax rate in Midland, Texas is 8.25%, which is the maximum any location in Texas can charge. That total combines a 6.25% state tax with 2.00% in local taxes split among the city, the county, and the Midland County Hospital District. You pay this combined rate on most retail purchases made inside city limits.
How the 8.25% Breaks Down
Every sales tax dollar collected in Midland is split among four taxing authorities:
- State of Texas: 6.25%, which applies to all taxable transactions statewide and flows to the state’s general revenue fund.1State of Texas. Texas Code Tax Code 151.051 – Sales Tax Imposed
- City of Midland: 1.25%, funding municipal services including roads, police, and fire departments.
- Midland County: 0.50%, supporting countywide administration and law enforcement.
- Midland County Hospital District: 0.25%, funding local healthcare operations, including community health services and behavioral health programs. Voters approved this portion, and it took effect in January 2021.2City of Midland. Frequently Asked Questions – Section: Finance
Texas law caps combined local sales taxes at 2.00% on top of the state’s 6.25%, so no location in the state exceeds 8.25%.3Texas Comptroller of Public Accounts. Local Sales and Use Tax Frequently Asked Questions Midland already uses the full 2.00%, so no additional local taxing authority can layer on more.
One address matters here. If a store sits outside city limits but still within Midland County, the city’s 1.25% drops off and the rate falls to 7.00%.4Midland Economic Development Corporation. Local Tax Rates – Section: Sales and Use Tax That difference can show up when you compare receipts from stores on different sides of the city boundary.
What the 8.25% Applies To
The rate covers most physical goods sold at retail: furniture, electronics, clothing, appliances, and the like. Texas defines taxable tangible personal property as anything that can be seen, weighed, measured, felt, or touched, and the definition also pulls in computer programs and prepaid calling cards.5State of Texas. Texas Code Tax Code 151.009 – Tangible Personal Property
Texas also taxes a defined set of services. The ones most people encounter on their bills include telecommunications such as your cell phone service, cable television and streaming video, credit reporting, security and alarm monitoring, data processing, and repair or maintenance of personal property like appliances or furniture.6Texas Comptroller of Public Accounts. Taxable Services
Streaming and Cloud Software
Streaming video and on-demand services are taxable in Texas as cable television services, regardless of whether they arrive through traditional cable or over the internet. Cloud-based software (SaaS) is taxed as a data processing service, but 20% of the charge is automatically exempt, so you effectively pay the 8.25% on 80% of the bill.6Texas Comptroller of Public Accounts. Taxable Services
What’s Exempt
Several categories are completely free of the 8.25%, and the biggest exemptions are the ones that most affect a household budget.
Groceries
Most food you’d buy at a grocery store is tax-free in Texas. That includes produce, meat, dairy, eggs, bread, cereals, snack items, and similar staples.7Texas Comptroller of Public Accounts. Grocery and Convenience Stores The exemption covers food products for human consumption broadly.8Texas Public Law. Texas Code Section 151.314 – Food and Food Products Prepared food, candy, soft drinks, and items sold with eating utensils are treated differently and may be taxable depending on how they’re sold.
Prescription Medicine and Medical Devices
Prescription drugs dispensed by a licensed practitioner are exempt, whether for humans or animals. Medical devices like hearing aids, prosthetics, corrective lenses, braces, and orthopedic appliances are also tax-free, and most of those don’t require a prescription. Over-the-counter drugs with a Drug Facts label on the packaging qualify for the exemption without a prescription; those without the label need one.9Texas Comptroller of Public Accounts. Sales Tax Exemptions for Healthcare Items
Internet Access
Even though internet access appears in the state’s statutory list of taxable services, federal law overrides it. The Internet Tax Freedom Act permanently banned state and local taxation of internet access, and separately stated charges for internet access have been exempt from Texas sales tax since July 1, 2020. Your monthly broadband or fiber bill should not include sales tax on the internet access portion, though bundled services that include taxable telecommunications may still carry a tax charge on those components.10Texas Comptroller of Public Accounts. Sales Tax on Telecommunications Services
Sales Tax Holidays
Texas holds several weekends each year where qualifying purchases are completely tax-free. The back-to-school holiday is the most widely used, and for 2026 it runs August 7 through 9.11Texas Comptroller of Public Accounts. Sales Tax Holiday During that weekend, most clothing, footwear, school supplies, and backpacks priced under $100 per item are exempt. There’s no limit on the number of qualifying items you can buy, and the exemption applies whether you shop in a Texas store or buy online from a seller doing business in the state.
Items priced at $100 or more don’t qualify, and neither do specialty athletic or protective clothing, accessories like jewelry and handbags, or computers and software. Shipping charges count toward the $100 threshold, so a $95 shirt with $6 shipping tips over the limit and owes full tax.11Texas Comptroller of Public Accounts. Sales Tax Holiday Texas also runs separate holidays for emergency preparedness supplies and for energy- and water-efficient products at different times of the year.12Texas Comptroller of Public Accounts. Sales Tax Holidays Frequently Asked Questions
Online and Out-of-State Purchases
When you buy something online or from an out-of-state seller who doesn’t collect Texas sales tax, you technically owe use tax at the same 8.25% rate. Use tax is the backstop to sales tax, keeping you from avoiding the charge just by ordering from a seller that doesn’t collect it. Most large online retailers now collect Texas tax automatically under economic nexus rules, but smaller sellers or purchases from individuals may slip through. Texas expects you to self-report and pay the use tax you owe, though enforcement against individual consumers for small purchases is minimal in practice.