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Texas Sales Tax Tips

If you're shopping in Texas, you will find yourself paying sales tax on most common goods that you purchase. The rates of sales tax differ depending on what it is you are purchasing and where you are. Some cities have chosen to add additional sales tax that goes to support the local economy. Most of the sales tax goes directly to fund state government, because Texas does not have a state income tax.

State Sales Tax

Across Texas, there is a flat sales tax charged on most goods. The state rate is 6.25 percent, meaning that for every dollar spent, 6.25 cents is added and goes to the state to fund various state government programs. The tax is imposed on retail sales and leases of most goods. One notable exception to the sales tax is groceries, which are not taxed.

Local Taxes

Depending on what city you make your purchase, you could be charged up to 2 percent more. The state has capped the sales tax rate at 8.25 percent, but allows local municipalities to determine what other sales taxes to add. These taxes can go to the city government, county government or to a special district. The special districts can fund public transportation, recreation centers, business development, beach improvement, public housing, or police work, depending on what is decided locally. Any of these additional sales taxes must be approved by a majority of voters living in the city.

Retail Stores

If you own a retail store in Texas or plan to open one, you must apply for a state sales tax permit. This registers your business with the state. You must track how much goods or services you sell, charge your customers sales tax and pay that tax to the state on a regular basis.

Other goods

Some types of goods are subject to additional taxes that fall outside of sales tax. This includes liquor, tobacco products, hotel stays and vehicles.

Historical Data

You can research how much retail sales went on in a particular Texas city by looking on the Texas Comptroller's website. There, a quarterly analysis of sales tax trends is posted.

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