Taxes in Texas

Texas Tax Rates, Collections, and Burdens

How does Texas’s tax code compare? Texas does not have an individual income tax. Texas does not have a corporate income tax but does levy a gross receipts tax. Texas has a 6.25 percent state sales tax rate, a max local sales tax rate of 2.00 percent, and an average combined state and local sales tax rate of 8.20 percent. Texas’s tax system ranks 14th overall on our 2022 State Business Tax Climate Index.

Each state’s tax code is a multifaceted system with many moving parts, and Texas is no exception. The first step towards understanding Texas’s tax code is knowing the basics. How does Texas collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures: How Does Your State Compare?

Top Individual Income Tax Rate

Does Not Have an Individual Income Tax

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State and Local Individual Income Tax Collections per Capita

$0

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State and Local Tax Burden

8.6%

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Top Corporate Income Tax Rate

Does Not Have a Corporate Income Tax

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State Business Tax Climate Index Ranking

14

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State Sales Tax Rate

6.25%

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Average Local Sales Tax Rate

1.95%

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Combined State and Average Local Sales Tax Rate

8.20%

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State and Local General Sales Tax Collections per Capita

$1614

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State Gasoline Tax Rate (cents per gallon)

20¢

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State Cigarette Tax Rate (dollars per 20-pack)

$1.41

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Property Taxes Paid as a Percentage of Owner-Occupied Housing Value

1.66%

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State and Local Property Tax Collections Per Capita

$2098

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Featured Articles

Do Unto Others: The Case for State Income Tax Reciprocity

November 16, 2022

2023 State Business Tax Climate Index

October 25, 2022

Where Do People Pay the Most in Property Taxes?

September 13, 2022

Unpacking the State and Local Tax Toolkit: Sources of State and Local Tax Collections (FY 2020)

August 25, 2022

2022 Sales Tax Holidays: Bad Policy Any Year, But Especially in Response to High Inflation

August 2, 2022

State and Local Sales Tax Rates, Midyear 2022

July 19, 2022

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