Texas Income Tax
Texas has no state income tax. This makes it one of the most attractive states for high earners and retirees. You will still owe federal income tax.
Texas Sales Tax
The state sales tax rate in Texas is 6.25%. With an average local sales tax of 1.94%, the combined average sales tax rate is 8.19%.
Texas Property Tax
The effective property tax rate in Texas is 1.68%. With a median home value of $280,500, the median annual property tax bill is $4,510 ($376/month).
Property taxes in Texas are significantly higher than the national average, which is an important factor for homebuyers.
Corporate & Business Taxes
The corporate tax rate in Texas is 0% (franchise tax). Texas does not impose a traditional corporate income tax, making it attractive for businesses.
Other Taxes in Texas
| Tax Type | Rate / Amount |
|---|---|
| Gas Excise Tax | $0.20/gallon |
| Cigarette Tax | $1.41/pack |
| Estate Tax | No |
| Inheritance Tax | No |
Key Facts
No income tax but high property taxes. Franchise (margin) tax applies to businesses.
Compare to Other States
See how salaries compare on our average salary in Texas page. Thinking about starting a business? Check our LLC guide for Texas. See the current minimum wage in Texas.
Financial Calculators
Plan your finances in Texas with our free tools:
- Paycheck Calculator — estimate take-home pay after taxes
- Salary Calculator — convert hourly to annual pay
- Mortgage Calculator — estimate monthly home payments
- Home Affordability Calculator — see how property taxes affect what you can afford