Taxable purchases in Texas include nearly every physical good you can buy, a specific list of 16 service categories, and motor vehicles. The state rate is 6.25 percent, and local jurisdictions can add up to 2 percent more, for a maximum combined rate of 8.25 percent.1Texas Comptroller of Public Accounts. Local Sales and Use Tax Frequently Asked Questions Groceries, prescription drugs, and residential utilities are the biggest exemptions. Sellers usually collect the tax at checkout and send it to the Texas Comptroller of Public Accounts, but for private car sales and out-of-state online orders, the responsibility shifts to you.
Physical Goods Are Taxable by Default
If you can touch it, assume it’s taxable. Texas law calls this “tangible personal property” and defines it as anything that can be seen, weighed, measured, felt, or touched.2State of Texas. Texas Tax Code 151.009 – Tangible Personal Property Every sale of tangible personal property is presumed taxable unless a specific exemption applies. Furniture, electronics, appliances, clothing, toys, books, and office supplies all fall in.
Computer software counts too, whether you buy it on a disc or download it. Prepaid phone cards are taxable. So are vitamins and dietary supplements, which people often expect to be treated like medicine.
Food: What’s Taxed and What Isn’t
Grocery food bought for home preparation is exempt. Staples like flour, sugar, bread, milk, eggs, produce, meat, fish, spices, coffee, and tea qualify, along with frozen dinners, canned goods, and ice cream in a carton.3State of Texas. Texas Tax Code 151.314 – Food and Food Products
Once food crosses into “ready to eat” territory, it becomes taxable. Food is taxable when it meets any of these conditions:
- Sold ready to eat. Meals, sandwiches, and salads from restaurants, delis, cafeterias, food trucks, and vending machines all count.
- Sold heated. A rotisserie chicken from the grocery store hot case is taxable; a raw chicken from the refrigerated section is not.
- Mixed by the seller. When a store combines two or more ingredients into a single item for sale, the result is taxable. A pre-made pasta salad qualifies; a bag of dry pasta does not.
Candy and soft drinks are carved out of the grocery exemption and taxed at the full rate. The Comptroller’s definition of candy includes chocolate bars, taffy, yogurt-coated nuts, and any nuts roasted with a sweetener. Soft drinks include all carbonated beverages, sports drinks, flavored water, and any drink mix that contains natural or artificial sweeteners. Plain water, milk, and beverages with more than 50 percent fruit or vegetable juice stay exempt.4Texas Comptroller of Public Accounts. Grocery and Convenience Stores
Services Are Taxable Only If Listed
Services work the opposite way from goods. A service is only taxable if it appears on a specific list in the Tax Code. Texas identifies 16 categories of taxable services.5Texas Comptroller of Public Accounts. Taxable Services If a service isn’t on the list, no sales tax applies, no matter how expensive it is. That’s why haircuts, medical care, and legal advice never carry sales tax in Texas.
The categories most consumers run into:
- Repair and remodeling of personal property, like appliance repair, furniture reupholstering, or lawnmower service.
- Personal services such as laundry, dry cleaning, and pet grooming.
- Landscaping and lawn care, including mowing and tree trimming.
- Pest control.
- Security services and alarm monitoring for nonresidential properties.
- Repairs to nonresidential real property.
One line worth noting: repairs to nonresidential real property (commercial buildings, offices, warehouses) are taxable, but labor on repairs to your home is not.6Cornell Law Institute. 34 Texas Administrative Code 3.357 – Nonresidential Real Property Repair, Restoration and Remodeling Residential covers family dwellings, apartment complexes, nursing homes, and condominiums.
The remaining taxable service categories skew toward businesses: data processing, information services, credit reporting, debt collection, telecommunications, cable television, insurance services, telephone answering, motor vehicle parking, and utility transmission.
Prescription Drugs and Residential Utilities
Prescription medications are exempt. Over-the-counter drugs and medicines that carry an FDA-required “Drug Facts” panel on the label are also exempt.4Texas Comptroller of Public Accounts. Grocery and Convenience Stores Vitamins and dietary supplements do not qualify and are taxed at the standard rate.
Gas and electricity used in a home are exempt from state sales tax. The exemption covers owner-occupied homes and rental units where the tenant has a lease of at least 30 consecutive days.7Texas.Public Law. Texas Tax Code 151.317 – Gas and Electricity Local sales taxes may still apply to residential utilities, so you might see some tax on your electric bill even though the state portion is waived.
Motor Vehicle Purchases
Buying a car, truck, or motorcycle in Texas triggers a 6.25 percent motor vehicle sales tax.8Texas Comptroller of Public Accounts. Tax Rates – Motor Vehicle Tax Guide The rate matches the state sales tax, but the collection process is different. The tax is calculated on the purchase price and collected by the county tax assessor-collector when you title and register the vehicle. This applies whether you buy from a dealership or a private seller. Private-party sales catch people off guard because no business collects the tax on your behalf; the obligation falls directly on you at the title office.
The Annual Sales Tax Holiday
Texas holds a sales tax holiday each August for back-to-school shopping. In 2026, it runs from August 7 through August 9. During that weekend, these items are exempt from both state and local sales tax:9Texas Comptroller of Public Accounts. Sales Tax Holiday
- Clothing and footwear priced under $100 per item.
- Backpacks (including wheeled backpacks and messenger bags) priced under $100.
- School supplies priced under $100 per item.
The $100 threshold applies to the total sales price of each individual item, including shipping and handling. Items at exactly $100 or above don’t qualify. Jewelry, watches, handbags, luggage, athletic-specific clothing, and computers are excluded even during the holiday. Online purchases qualify as long as you pay during the holiday weekend, even if delivery happens later.
Online and Out-of-State Purchases
When you buy a taxable item from a seller who doesn’t collect Texas sales tax, you owe use tax directly to the state at the same 6.25 percent rate plus any applicable local tax.10Texas Comptroller of Public Accounts. Sales and Use Tax The item just needs to be stored, used, or consumed in Texas for the obligation to apply.
For most everyday online shopping, this is handled for you. Texas requires marketplace providers like Amazon, eBay, and Etsy to collect and remit sales tax on behalf of their third-party sellers.11State of Texas. Texas Tax Code 151.0242 The gap shows up with smaller independent websites, international purchases, and items bought in person out of state. If you bring back furniture from a trip abroad or order custom parts from an overseas shop, use tax applies and you’re responsible for reporting it.