State taxes: Texas

Texas is 1 of only 7 states that do not tax individual wage income. The state’s constitution restricts passage of a personal income tax. The Lone Star State, however, does collect a gross receipts tax from some businesses. More on Texas taxes can be found in the tabbed pages below.

Personal income tax

Texas residents pay no personal state income tax.

The state does, however, impose a variety of other taxes. A list and rates can be found at the Texas Comptroller’s website.

Sales taxes

Texas has a 6.25% state sales tax.

Local sales and use taxes levied by cities, counties, transit and special purpose districts can add up to 2% to the sales tax, making the combined total on purchases as high as 8.25%.

You can find your specific sales tax rate on the online rate finder.

Personal and real property taxes

Texas does not have a state property tax.

Local taxing units — counties, cities and school districts — assess and collect property taxes on all real and income-producing tangible personal property not exempt by state or federal law. Personal property — including automobiles, airplanes, boats and travel trailers — that does not produce income is mostly exempt from taxation.

Total tax rates vary from location to location and may change from year to year.

A residential homestead exemption is available for all who owned property on Jan. 1. A greater exemption is available for taxpayers who are 65 and older or disabled.

Homeowners need to file Form 50-114, Application for Residence Homestead Exemption, with their appropriate taxing jurisdictions between Jan. 1 and no later than April 30.

Inheritance and estate taxes

Texas does not impose an inheritance tax.

Because of the phaseout of the federal estate tax credit, Texas’ estate tax is not imposed on estates of people who died in 2005 or later.

Other Texas tax facts

Recreational boating is big in Texas, so the state collects a 6.25% sales tax on the price of a boat or boat motor (minus any trade-in allowance) purchased in the state. The state’s corresponding use tax (less credit for taxes paid to another state) also is imposed on any boat or boat motor purchased outside of Texas and brought into the Lone Star state. A $15 fee may be due on a boat or boat motor brought into Texas by a new resident.

The Lone Star State’s franchise tax applies to all active businesses receiving state law liability protection. An online calculator can help you figure your potential business tax liability.

A variety of publications and financial reports for various state-funded programs is available on the comptroller’s website.

For more information, contact the Texas Comptroller of public accounts at (800) 531-5441, ext. 5-0996, or visit the website.

To download tax forms on this site, you will need to install a free copy of Adobe Acrobat Reader. Click here for instructions.