The Williamson County sales tax rate is 0.5%, which sits on top of the 6.25% Texas state rate for a baseline of 6.75% in unincorporated parts of the county. Inside city limits, municipal and special-district taxes typically push the combined rate to the 8.25% statewide maximum. What you actually pay at the register depends on the address where the sale happens.1Texas Comptroller of Public Accounts. City Sales and Use Tax
How the Rate Is Built
Every retail sale in Texas starts with the 6.25% state tax.2State of Texas. Texas Tax Code Section 151.051 – Sales Tax Imposed Local jurisdictions can add their own taxes, but the combined local share cannot exceed 2%, which caps any Texas sale at 8.25%.3Texas Comptroller of Public Accounts. Sales and Use Tax
Williamson County occupies 0.5% of that 2% local space under Texas Tax Code Chapter 323, which lets counties levy the tax in half-percent increments. The revenue can go to any county purpose.4State of Texas. Texas Tax Code Section 323.103 – Sales Tax The remaining 1.5% is available for cities, transit authorities, and special-purpose districts such as emergency services or health districts to claim.
What You Pay Depends on Where You Buy
Round Rock, Georgetown, and Cedar Park all hit the full 8.25% combined rate, meaning city and district taxes fully consume the available 2% local cap.1Texas Comptroller of Public Accounts. City Sales and Use Tax Make the same purchase in unincorporated Williamson County and the rate is 6.75%, because no city tax applies.
The practical consequence for business owners is that a storefront a few hundred feet on either side of a city limit line can carry a different collection obligation. Before you set up a point-of-sale system or write software to calculate tax, verify your address against the Comptroller’s rate lookup tool. Using the wrong rate is one of the easiest ways to create a problem during an audit.
What Gets Taxed and What Doesn’t
Most tangible goods sold at retail are taxable: electronics, furniture, clothing, building materials, household items. Texas also taxes several services that buyers don’t always expect. Landscaping and lawn care, including mowing, trimming, planting, fertilizing, and tree maintenance, are subject to sales tax.5Texas Comptroller of Public Accounts. Landscaping and Lawn Care Services Data processing services like word processing, data entry, and data storage are taxable too, along with telecommunications, cable television, and certain amusement services.6Texas Comptroller of Public Accounts. Taxable Services
On the exempt side, most grocery staples are tax-free. Cereals, meat, dairy, produce, eggs, and unprepared snack items like chips and granola bars qualify.7State of Texas. Texas Tax Code Section 151.314 – Food and Food Products Prepared food sold ready to eat at restaurants, food trucks, or cafeterias is taxable, and so are candy, soft drinks, and ice.
Prescription drugs, insulin, over-the-counter medicines carrying a Drug Facts panel, and medical devices such as hearing aids, prosthetics, and braces are exempt. Hospital beds, blood glucose test strips, wound care dressings, and diapers also qualify.8Cornell Law Institute. 34 Tex. Admin. Code 3.284 – Drugs, Medicines, Medical Equipment, and Devices Agricultural items used to produce food for human consumption have their own exemption.
The August Sales Tax Holiday
Texas holds a sales tax holiday every August, and it applies in full within Williamson County. In 2026 it runs Friday, August 7 through midnight Sunday, August 9. During that weekend, most clothing, footwear, school supplies, and backpacks priced under $100 per item are exempt from state and local sales tax.9Texas Comptroller of Public Accounts. Sales Tax Holiday
The $100 threshold is per item and includes any shipping or handling the seller charges. Jewelry, handbags, watches, luggage, athletic or protective-use clothing, and computers don’t qualify.
Getting a Sales Tax Permit
You need a Texas Sales and Use Tax Permit before you make your first taxable sale or provide a taxable service. Apply through the Comptroller’s eSystems portal online, or mail Form AP-201.10Texas Comptroller of Public Accounts. Texas Online Tax Registration Application You’ll need your NAICS code, a federal employer identification number or Social Security number, and documents describing your business structure, such as a partnership agreement or articles of incorporation. If the business has officers or directors, provide their names and contact information.
The permit is free. Selling without one exposes you to back taxes, penalties, and interest from the first transaction, and the Comptroller can revoke permits for repeated noncompliance.
Resale Certificates
When you buy goods specifically for resale, you can purchase them tax-free by giving your supplier a completed Texas Sales and Use Tax Resale Certificate (Form 01-339). The certificate requires your permit number, a description of the items, and your signature affirming the goods will be resold.11Texas Comptroller of Public Accounts. Sales and Use Tax Resale Certificate / Exemption Certification
Using a resale certificate for items you actually keep and use in the business is a criminal offense under Texas law, with charges ranging from a Class C misdemeanor to a second-degree felony depending on the tax evaded. Sellers who accept these certificates should verify the buyer’s permit number and keep each certificate on file. During an audit, the burden is on the seller: no valid certificate means you owe the tax plus penalties.
Filing Deadlines and the Timely-Filer Discount
The Comptroller assigns your filing frequency based on how much tax you collect. Most businesses file monthly, with returns due by the 20th of the month following the reporting period. When the 20th falls on a weekend or federal holiday, the deadline shifts to the next business day.12Texas Comptroller of Public Accounts. Due Dates for Taxes, Fees and Information Reports Quarterly filers report in April, July, October, and January. Lower-volume businesses may file annually. You still need to file a return for every assigned period, even if you collected no tax.
You can file electronically through Webfile or mail Form 01-114, and pay by electronic funds transfer or credit card.13Texas Comptroller of Public Accounts. Instructions for Completing Texas Sales and Use Tax Return
File on time and the state lets you keep 0.5% of the tax collected. Monthly and quarterly filers who also prepay get an additional 1.25% discount on the prepaid amount.14Texas Comptroller of Public Accounts. Texas Sales and Use Tax Frequently Asked Questions File one day late and the discount is gone.
Penalties for Late Filing and Nonpayment
Paying one to 30 days late brings a 5% penalty. After 30 days, the penalty rises to 10%. If you still haven’t paid after receiving a formal Notice of Tax Due, another 10% penalty applies, bringing the total to 20% of the tax owed.15Texas Comptroller of Public Accounts. Penalties for Past Due Taxes On top of the percentage penalties, every late return triggers a flat $50 late-filing fee, even when no tax was due. Interest starts on the 61st day after the due date at a rate set annually.
Collecting sales tax from customers and then failing to send it to the state is a separate, criminal matter. The charge scales with the amount unremitted, from a Class C misdemeanor for under $50 up to a first-degree felony for $200,000 or more. A continuous pattern of nonpayment can be aggregated into a single, higher-grade offense.16State of Texas. Texas Tax Code Section 151.7032 – Failure to Pay Taxes Collected; Criminal Penalty
Use Tax on Out-of-State Purchases
Buying something from an out-of-state seller who doesn’t charge Texas tax doesn’t make the purchase tax-free. You owe use tax at the same combined rate that would have applied to a local purchase. In Williamson County, that’s 6.75% in unincorporated areas and up to 8.25% inside the larger cities. The rule applies to both businesses and individuals, and it covers furniture ordered from untaxed websites, equipment shipped in from other states, and supplies picked up at out-of-state trade shows.
Businesses report use tax on the same Form 01-114 they use for sales tax. Individuals without a permit can contact the Comptroller directly to arrange payment. Businesses get caught on this during audits when the Comptroller cross-references vendor and marketplace data against reported figures.
If You Sell Into Texas From Another State
Out-of-state sellers must collect and remit Texas sales tax once total Texas revenue reaches $500,000 in the preceding 12 calendar months. That threshold counts gross revenue from all tangible goods and services sold into Texas, taxable or not, plus shipping, handling, and installation. It includes sales for resale and sales to exempt entities.17Texas Comptroller of Public Accounts. Remote Sellers and Marketplace Frequently Asked Questions
Once you cross the threshold, you need a Texas permit and must collect the correct rate based on where the buyer receives the goods, which means Williamson County’s local taxes apply to deliveries into the county. Marketplace facilitators like Amazon and eBay handle collection for sales made through their platforms. For sales through your own website, the responsibility is yours.