Texas Tax Guide 2026: No Income Tax, But What About Property and Sales Tax?
Texas has no state income tax, but property tax is among the highest. Complete guide to Texas taxes in 2026.
Everyone knows Texas has no income tax. It's practically a marketing slogan at this point. But if you're thinking about moving to Texas — or you already live there and want to understand your full tax picture — you need to look beyond the income tax line. Texas compensates for the lack of income tax with some of the highest property taxes in the country.
Let me break down exactly what you'll pay in Texas, from property tax to sales tax to everything in between.
Official Source
Texas tax data is from the Texas Comptroller. Property tax is from the Texas Property Tax Code.
No State Income Tax in Texas: What It Means
Texas is one of nine states with no personal income tax. That means zero state tax on your wages, self-employment income, investment income, retirement distributions, or capital gains. There is no state income tax to file, no state tax return to worry about (for personal income), and no state withholding from your paycheck.
For someone earning $75,000, this translates to savings of roughly $3,000 to $4,000 compared to states like California or New York. On a $150,000 salary, the savings can exceed $8,000 per year.
But before you celebrate, let's look at where Texas makes up that revenue.
Texas Property Tax: Among the Highest in the Nation
Texas property tax rates are the seventh-highest in the United States, with an average effective rate of approximately 1.60% of your home's assessed value. Some counties are even higher, pushing past 2.2%.
What This Means in Real Dollars
| Home Value | Annual Property Tax (avg 1.60%) |
|---|---|
| $200,000 | $3,200 |
| $350,000 | $5,600 |
| $500,000 | $8,000 |
| $750,000 | $12,000 |
If you're coming from a state like California (0.71% average effective rate), the property tax difference can be shocking. On a $500,000 home, you'd pay about $3,550 in California property tax versus $8,000 in Texas — a difference of $4,450 per year.
For renters, this is less of an issue since you don't directly pay property tax. But landlords pass these costs through in rent, so you're still paying indirectly.
Use our Texas Tax Calculator to see your complete tax picture including property tax analysis.
Texas Sales Tax: 6.25% State + Local Additions
Texas charges a 6.25% state sales tax, and local jurisdictions can add up to 2%, making the maximum combined rate 8.25%. The average combined rate across Texas is about 8.19%.
What's Taxable in Texas?
Most retail purchases are subject to sales tax, but there are some important exemptions:
- Groceries: Most unprepared food items are exempt
- Prescription drugs: No sales tax
- Over-the-counter medicines: Taxable
- Clothing: Fully taxable (unlike some states with clothing exemptions)
If you spend $30,000 per year on taxable goods and services in Texas at an average 8.19% rate, you're paying about $2,457 in sales tax annually.
Understanding Taxable Income in Texas
Since Texas has no state income tax, your taxable income is only relevant for federal tax purposes. Your federal taxable income is calculated by taking your gross income and subtracting either the standard deduction or itemized deductions.
For 2026, the federal standard deduction is $16,100 for single filers and $32,200 for married filing jointly. Even though Texas doesn't tax your income, you still need to file federal tax returns and pay federal income tax.
Filing Tax Returns in Texas
Texans file federal tax returns like everyone else, but the process is simpler because there's no state return to file. You'll need:
- Federal Form 1040: Standard federal tax return
- No state income tax return: Texas doesn't require one
- Property tax: Paid to your local county tax assessor (not on your tax return)
- Franchise tax: Only for businesses, not individuals
This simplicity is one of the real benefits of living in Texas. No state tax return means less paperwork, fewer chances for errors, and no state tax deadline to worry about.
The Franchise Tax: Texas's Business Tax
If you own a business in Texas, you may be subject to the Texas franchise tax — sometimes called the "margin tax." This is not an income tax on individuals, but a tax on business entities. The rates range from 0.331% to 0.75% on your business margins, depending on your revenue and industry.
Most small businesses with revenue under $2.47 million are exempt from the franchise tax. But if your business grows, this is something to plan for.
How Texas Compares to Other States
The total tax burden in Texas — combining property tax, sales tax, and other taxes — averages around 8.22% of income, according to the Tax Foundation. This puts Texas in the middle of the pack nationally.
Texas vs. California
| Tax Type | Texas | California |
|---|---|---|
| Income Tax | 0% | 1% – 13.3% |
| Property Tax (avg) | 1.60% | 0.71% |
| Sales Tax (avg) | 8.19% | 8.82% |
| Total Burden | ~8.22% | ~11.49% |
On a $100,000 salary with a $350,000 home, Texas is typically $5,000–$7,000 cheaper per year than California, even with higher property taxes. Use our comparison tool to see the exact numbers for your situation.
Texas vs. New York
The comparison with New York is even more dramatic. New York's income tax alone can exceed $6,000 on a $100,000 salary, plus NYC residents pay additional city taxes. Texas saves the average New Yorker $8,000–$12,000+ per year.
The Bottom Line on Texas Taxes
Texas is genuinely a low-tax state, but not as dramatically as the "no income tax" slogan suggests. The property tax is significant, and if you own an expensive home, it can eat into your income tax savings.
Texas makes the most sense if:
- You're a renter (you avoid the property tax entirely)
- You have a high income but a modest home
- You're a business owner who can benefit from no state income tax
- You're retiring and want to protect your retirement income
Texas may not be ideal if:
- You own an expensive home relative to your income
- You live in an area with very high property tax rates (some suburbs exceed 2.5%)
- You rely on public services that are funded by property taxes
Use our Texas Tax Calculator to see exactly what you'll pay, including property tax analysis and cost-of-living comparisons.
Texas Income Tax: The Complete Picture
When people search for "texas income tax," they often find conflicting information. Let's be crystal clear: Texas does not have a personal state income tax. There is no texas income tax rate, no texas income tax brackets, and no texas income tax return to file for individuals.
The Texas income tax percentage for individuals is exactly 0%. This has been the case since Texas constitutional amendment in 1993, which actually makes it extremely difficult to ever implement a state income tax.
Texas Income Tax Rate 2025 vs 2026
Whether you're looking at texas income tax rate 2025 or texas income tax rate 2026, the answer is the same: 0%. Unlike other states that adjust their brackets annually, Texas has no brackets to adjust. The texas income tax brackets 2026 simply don't exist for individuals.
However, businesses in Texas do pay the franchise tax (sometimes called the margin tax), which functions similarly to an income tax for business entities. Use a texas income tax calculator (like ours) to estimate your total tax burden — which will include federal tax, FICA, property tax, and sales tax, but zero state income tax.
How Much Is Your Salary After Taxes in Texas?
Here are the most common salary questions about Texas taxes, answered with real numbers:
$100,000 After Taxes in Texas
On a $100,000 salary in Texas (single filer), your take-home pay is approximately $75,600. Here's the breakdown:
- Federal income tax: ~$14,001
- FICA (Social Security + Medicare): ~$7,649
- Texas state income tax: $0
- Total tax: ~$21,650 (21.7% effective rate)
$200,000 After Taxes in Texas
On $200,000 in Texas, you take home approximately $141,300. Texas saves you roughly $10,000–$15,000 compared to California or New York on this salary.
Other Common Salaries After Taxes in Texas
| Salary | Take-Home Pay | Effective Tax Rate |
|---|---|---|
| $60,000 after taxes Texas | ~$48,500 | 19.2% |
| $70,000 after taxes Texas | ~$55,600 | 20.6% |
| $120,000 after taxes Texas | ~$92,500 | 22.9% |
| $150,000 after taxes Texas | ~$112,800 | 24.8% |
| $250,000 after taxes Texas | ~$180,200 | 27.9% |
| $300,000 after taxes Texas | ~$212,000 | 29.3% |
For a precise calculation based on your specific situation (401k contributions, filing status, etc.), use our Texas Tax Calculator which works as a Dallas income tax calculator, Houston tax calculator, or any Texas city.
$25 an Hour After Taxes in Texas
At $25/hour (approximately $52,000/year), your take-home pay in Texas is roughly $42,400 after federal tax and FICA. Near Houston TX or any other Texas city, the result is the same since there's no local income tax.
Texas Sales Tax: Rates, Cars, and Permits
Texas Sales Tax Rate
The Texas sales tax rate is 6.25% at the state level, with local jurisdictions adding up to 2% for a maximum combined rate of 8.25%. The average combined rate across Texas is approximately 8.19%.
Is all of Texas 8.25% sales tax? No. The 8.25% is the maximum combined rate, but not all areas charge the full 2% local add-on. Some areas have lower combined rates, while major cities like Dallas, Houston, and San Antonio typically hit the 8.25% maximum.
Texas Sales Tax on Cars
Texas sales tax on cars is 6.25% (the state rate only — no local add-ons for motor vehicles). On a $30,000 car, you'd pay $1,875 in sales tax. Texas also charges a standard presumptive value (SPV) tax on used car purchases from private parties, which may result in a different tax amount.
Texas Sales Tax Permit and Login
If you're a business owner, you'll need a texas sales tax permit from the Texas Comptroller. You can:
- Apply for a texas sales tax permit online at the Comptroller's website
- File returns via texas sales tax webfile (the state's online filing system)
- Access the texas sales tax login at comptroller.texas.gov
- Use the texas sales tax lookup tool to verify rates by location
Texas Sales Tax Exemption
Texas offers sales tax exemptions for:
- Groceries (most unprepared food)
- Prescription drugs
- Manufacturing equipment
- 100% disabled veterans (vehicle sales tax exemption)
- Agricultural items
You can file a texas sales tax exemption form (Form 01-339) to make tax-exempt purchases for qualifying reasons.
Texas Sales Tax Rate 2025 vs 2026
The Texas sales tax rate 2025 was 6.25% (state), and it remains 6.25% for 2026. The state base rate rarely changes, but local rates can shift based on voter-approved measures. Check the texas sales tax chart from the Comptroller for the most current rates by jurisdiction.
Frequently Asked Questions About Texas Taxes
Does Texas have income tax?
No. Texas is one of nine states with no personal income tax. The Texas income tax rate is 0% for all individuals, regardless of income level. This is protected by the Texas Constitution, making it extremely difficult to change.
What is the income tax rate in Texas?
The income tax rate in Texas is 0%. There are no texas income tax brackets for individuals. The only income-like tax is the franchise tax on businesses, which ranges from 0.331% to 0.75% on business margins.
How much is $100,000 taxed in Texas?
On $100,000 in Texas (single filer), you pay approximately $14,001 in federal income tax and $7,649 in FICA. Texas state income tax is $0. Your total tax is about $21,650, leaving you with ~$78,350 before property and sales taxes.
Is tax 8.25% in Texas?
The maximum combined sales tax rate in Texas is 8.25% (6.25% state + 2% local). Not all areas charge the full 8.25% — some have lower rates. Major cities like Dallas, Houston, and Austin typically charge the full 8.25%.
How much tax is on $100 in Texas?
On a $100 purchase in Texas at the standard 8.25% combined rate, you'd pay $8.25 in sales tax, for a total of $108.25. In areas with lower local rates, the tax would be less (e.g., $6.25 at the state-only rate).
What is the sales tax on a $30,000 car in Texas?
The sales tax on a $30,000 car in Texas is $1,875 (6.25% state rate only — no local add-ons for motor vehicles). This is significantly lower than the general sales tax rate in most Texas cities.
How do Texas taxes compare to other states?
Texas has a lower overall tax burden (~8.22%) compared to California (~11.49%), New York (~12.7%), and Illinois (~11.0%). However, Texas property taxes are among the highest in the nation. Use our comparison tools for detailed state-by-state analysis.
