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 13th overall on our 2023 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?

Texas Margin Tax Experiment Failing Due to Collection Shortfalls, Perceived Unfairness for Taxing Unprofitable and Small Businesses, and Confusing Rules

August 17, 2011

Texas “Pole Tax” Doesn’t Meet Expectations

July 20, 2011

Texas Legislature Looks to Soda Tax to Fill Budget Gap

March 17, 2011

Texas Budget Woes: Success or Failure?

January 19, 2011

Citing Income Tax Initiative, Texas Governor Reaches Out to Washington Businesses

November 1, 2010

Census Issues Population Estimates: Wyoming Gaining, Michigan Losing

December 28, 2009

Texas Mayor Pitches to Out-of-State CEOs, Highlighting Tax Foundation Rankings

December 28, 2009

Another Sales Tax Holiday Blog Post

August 21, 2009

TARP and a Tax Holiday Are Apples and Oranges

December 1, 2008

Texas Supreme Court Declines to Rehear Insurance Tax Case

September 3, 2008

Tax Foundation Urges Texas Court to Avoid Sparking an Interstate Tax War

August 25, 2008

Urging Texas Court to Avoid Sparking an Interstate Tax War — First American Title Ins. Co. v. Combs

August 12, 2008

Coupons Shouldn’t Be Taxed, but Government Vouchers Should

July 9, 2008

Which States Tax Celebrations of Independence from Taxation?

July 3, 2008

Texas “Pole Tax” Declared Unconstitutional

April 2, 2008

Texas Legislature Grapples with Property Taxes

February 15, 2008

Legal Battle Brewing Over Texas Fees on Adult Entertainment

December 10, 2007

Property Tax Hike in Dallas, But Senior Citizens Get a Break

August 30, 2007

Phone Company Sends Text Message: Remit Payment for Service and Taxes

February 13, 2007

What ‘Economic Incidence’ of Business Taxes Looks Like

January 18, 2007