Texas Sales Tax Exemptions
What is Exempt From Sales Tax In Texas?
The state of Texas levies a 6.25% state sales tax on the retail sale, lease or rental of most goods and some services. Local jurisdictions impose additional sales taxes up to 2%. The range of total sales tax rates within the state of Texas is between 6.25% and 8.25%.
Use tax is also collected on the consumption, use or storage of goods in Texas if sales tax was not paid on the purchase of the goods. The use tax rate is the same as the sales tax rate. Returns are to be filed on or before the 20th day of the month following the month in which the purchases were made. For example, purchases made in the month of January should be reported to the state of Texas on or before the 20th day of February.
What Transactions Are Generally Subject To Sales Tax In Texas
In the state of Texas, sales tax is legally required to be collected from all tangible, physical products being sold to a consumer. An example of items that are exempt from Texas sales tax are items specifically purchased for resale.This means that an individual in the state of Texas purchases school supplies and books for their children would be required to pay sales tax, but an individual who purchases school supplies to resell them would not be required to charge sales tax.
Items That Don’t Qualify For Sales Tax Holiday
- Items sold for $100 or more
- Clothing subscription boxes
- Specially-designed athletic activity or protective-use clothing or footwear
- For example, golf cleats and football pads are usually worn only when people play golf or football, so they do not qualify for the exemption.
- Tennis shoes, jogging suits and swimsuits, however, can be worn for other than athletic activity and qualify for the exemption.
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Texas Sales Tax Lookup By Zip Code
Look up sales tax rates in Texas by ZIP code with the tool below.Note that ZIP codes in Texas may cross multiple local sales tax jurisdictions.
Sales-Taxes.com last updated the Texas and Houston sales tax rate in October 2022 from the Texas Comptroller of Public Accounts
Sales-Taxes.com strives to provide accurate and up-to-date sales tax rates, however, our data is provided AS-IS for informational purposes only.
Please verify all rates with your state’s Department of Revenue before making any financial or tax decisions.
Houston Texas Sales Tax Rate
houston Tax jurisdiction breakdown for 2022
What does this sales tax rate breakdown mean?
Sales tax rates are determined by exact street address. The jurisdiction-specific rates shown add up to your minimum combined sales tax rate. The total rate for your specific address could be more.
Need the exact sales tax rate for your address?
What is the sales tax rate in Houston, Texas?
The minimum combined 2022 sales tax rate for Houston, Texas is . This is the total of state, county and city sales tax rates. The Texas sales tax rate is currently %. The County sales tax rate is %. The Houston sales tax rate is %.
Did South Dakota v. Wayfair, Inc affect Texas?
The 2018 United States Supreme Court decision in South Dakota v. Wayfair, Inc. has impacted many state nexus laws and sales tax collection requirements. To review the rules in Texas, visit our state-by-state guide.
Did COVID-19 impact sales tax filing due dates in Houston?
The outbreak of COVID-19 may have impacted sales tax filing due dates in Houston. Please consult your local tax authority for specific details. For more information, visit our ongoing coverage of the virus and its impact on sales tax compliance.
Automating sales tax compliance can help your business keep compliant with changing sales tax laws in Texas and beyond. AvaTax delivers real-time sales tax rates and uses advanced technology to map rates to exact address locations, based on the latest jurisdiction requirements.
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Wise Is The Cheaper Faster Way To Send Money Abroad
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Texas Sales Tax Exemptions For Healthcare
Texas divides hospitals and healthcare facilities in to two categories for purposes of sales and use tax exemptions nonprofit and for profit entities. The rules are straightforward for nonprofit hospitals and healthcare facilities because all items sold or leased to, or stored, used or consumed by organizations created for religious, educational or charitable purposes are exempt from Texas sales and use tax. For profit hospitals and healthcare facilities have more complex rules, but there are a number of categories of purchases which qualify for Texas sales tax exemptions. Some prominent exemptions include: hospital beds and replacement parts, intravenous or IV systems and their components, hypodermic needles and syringes, medical kits if the cost of the exempt items included in the kit are greater than the cost of the taxable items, medical oxygen and other drugs, prosthetic devices, labor charges and maintenance agreements for radiation emitting equipment such as x-rays, and orthopedic appliances and devices )
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The City Of Houston Collects A 2% Sales Tax On All Sales Services And Rentals Within The City Unless Exempt By Houston Municipal Code
Sales Tax is collected on the first $500.00 of a sale creating a $10.00 tax cap per transaction.
Sales tax is remitted monthly by the seller on tax return forms provided by the City.
Sales tax must be received in the Clerk’s office by 5:00 p.m. the last business day of the month following the reporting period. Postmarks are not considered on time. Payments must be made with cash, credit card, check or money order.
Sales tax payments may be made in person at Houston City Hall, located at 13878 W. Armstrong Road, Houston, AK or by mailing your completed sales tax return, along with payment, to:
City of Houston
Fax: 907.892.7677 Monday – Friday, 9 a.m. to 5 p.m.Email: firstname.lastname@example.org
NOTICE- Change in Sales Tax Code Effective September 15, 2020
The City of Houston approved Ordinance No.20-08 adopting the Alaska Remote Sellers Sales Tax Code by reference and adopting new language defining point of delivery for taxation as it relates to sales,rentals and services in the City as well as other definitions.
The following items highlight the changes uncured by adopting the ARSSTC which will become effective September 15, 2020.
Discounts Penalties Interest And Refunds
- Permitted sales taxpayers can claim a discount of 0.5 percent of the amount of tax timely reported and paid.
- Sales taxpayers who prepay can claim 0.5 percent for timely filing and paying, plus 1.25 percent for prepaying. See .
- A $50 penalty is assessed on each report filed after the due date.
- If tax is paid 1-30 days after the due date, a 5 percent penalty is assessed.
- If tax is paid over 30 days after the due date, a 10 percent penalty is assessed.
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I Just Bought/sold A Car How Do I Transfer The Title
- The seller must sign the back of the title or front depending on if it is an out of state title. The purchaser should sign the title if the vehicle is less than 10 years old. Only the purchaser/applicant is required to sign the You may also mail the application to: Ann Harris Bennett, Tax Assessor-Collector Attn: Title Mail Dept.P.O. Box 4089, Houston, Texas 77210-4089 If presented in person or by mail the owners photo ID is required. The ID must contain a unique identifier, expiration date, date of birth and expiration date. Proof of current insurance will be required in the new purchaser’s name. If the vehicle was purchased over 30 days ago insurance must be provided in the new purchasers name on the vehicle. If the vehicle was last registered in a non-affected county, proof of emissions-testing will be required. Please see Emissions-testing regulations.Additional identification rules apply for titling a vehicle in the name of a business or organization. Employees authorized to title a vehicle for leasing companies, government entities, organizations and private businesses must provide the following in addition to one of the acceptable forms of identification listed under the Forms of Identification tab:
- A letter of authorization on the employers official letterhead, or
- An official business card with the employer and employees name
Texas Sales Tax Exemptions For Manufacturing
Texas offers broad sales and use tax exemptions for manufacturers. Machinery and equipment used in the production process qualify for sales tax exemptions within Texas. Repair parts and labor to qualifying machinery and equipment are also exempt. Consumables including lubricants and chemicals consumed during the manufacturing process are exempt if their use is necessary and essential to prevent the failure, decline or deterioration of exempt manufacturing equipment. Safety apparel or clothing used by employees during the manufacturing or processing of tangible personal property is exempt provided that the apparel or clothing is not sold to the employees and the manufacturing process would not be possible without the use of such apparel or clothing. Utilities consumed during production also qualify for an exemption, however a valid utility study conducted by an engineer must document the percentage of utilities consumed for exempt purposes on any meter with mixed taxable and non-taxable use. Agile Consulting Groups sales tax consultants have a wealth of experience within the state of Texas and can ensure taxpayers are maximizing the benefit of Texas sales tax exemptions for which they qualify.
For more information on Texas sales tax exemptions please visit the sites below.
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Houston Texas Sales Tax Exemptions
In most states, essential purchases like medicine and groceries are exempted from the sales tax or eligible for a lower sales tax rate.Houston doesn’t collect sales tax on purchases of most groceries. Certain purchases, including alcohol, cigarettes, and gasoline, may be subject to additional Texas state excise taxes in addition to the sales tax.
Note that in some areas, items like alcohol and prepared food are charged at a higher sales tax rate than general purchases. Texas’s sales tax rates for commonly exempted categories are listed below. Some rates might be different in Houston.
All merchants operating in Houston must automatically calculate the sales tax due on each purchase made and include it in separately in the receipt. Goods bought for resale or other business use may be exempted from the sales tax. If you purchase goods online or through the mail and do not pay any sales tax, you are expected to pay use tax to the Texas Comptroller of Public Accounts . For more details, see the Texas sales tax.
Are Services Subject To Sales Tax In Texas
The state of Texas does not usually collect sales taxes on the vast majority of services performed. However, there are some services which are taxed. Examples would be cable television services, amusement services, waste collection services, floral services, construction services, mobile telecommunication services, landline communication services, natural gas and electricity services, and nonresidential real property repair and remodeling services.This means that a web designer would not be required to collect sales tax, while a florist might be required to collect sales tax.
You can find a table describing the taxability of common types of services later on this page.
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Monthly Update: Sales Tax
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SALES AND USE TAX COLLECTIONS
Sales and use tax collections year-to-date are up across the state. Collections are outpacing inflation. Most of the cities in metro Houston that collect the tax have seen substantial increases YTD. The jump has come from both consumer and business purchases, suggesting that the state and local economies continue to expand.
Glenn Hegar, Texas Comptroller of Public Accounts, notes that collections have accelerated in the manufacturing, construction, and mining and logging sectors. Also, collections related to restaurants and services have picked up. However, collections from furniture, sporting goods, and hobby stores have begun to soften. May collections continue to exceed pre-COVID numbers, but growth has slowed somewhat over the past three months.
Sales tax collections in the 12 most populous Houston-area cities YTD totaled $484.2 million, up from $425.1 million in the comparable period in 21.
ABOUT THE SALES AND USE TAX
The Texas Comptroller of Public Accounts releases allocated payments from the sales and use tax monthly. There is a two-month delay between when the tax is collected and when it is allocated. March sales data will be available in May.
Prepared by Greater Houston Partnership Research Division
Sales And Use Tax Rates
- The Texas state sales and use tax rate is 6.25 percent, but local taxing jurisdictions also may impose a sales and use tax up to 2 percent for a total maximum combined rate of 8.25 percent.
- Sales and use tax rates in the Houston region vary by city. The top 12 city sales and use tax rates range from 1 percent to 2 percent. All 12 cities have a total sales tax rate of 8.25 percent. Cities with less than a 2 percent rate have additional sales and use tax rates that may be related to transit, crime control, emergency services and more.
- Sales tax allocations from the City of Houston comprised the majority of total allocations in the region in 20, followed by Sugar Land, Conroe, Pasadena, Pearland, League City, Texas City, Baytown, Galveston, La Porte, Missouri City, and Friendswood.
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How Much Tax Is Due
If you buy the vehicle from a licensed dealer, the tax is 6.25% of the sales price. If you buy from a private party, such as a friend or relative, the tax is 6.25% of:
- the sales price, if you paid 80% or more of the vehicles standard presumptive value
- 80% of the vehicles SPV, if you paid less than that amount or
- the certified appraised value, if you paid less than 80% of the vehicles SPV and you get a certified appraisal.
For details, please refer to the instructions on the form 14-128.
Houston Sales Tax Region Zip Codes
The Houston sales tax region partially or fully covers 153 zip codes in Texas. Remember that ZIP codes do not necessarily match up with municipal and tax region borders, so some of these zip codes may overlap with other nearby tax districts. You can find sales taxes by zip code in Texas here
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Data Accuracy Disclaimer
Tax-Rates.org provides sales tax data for “Houston” on an AS-IS basis in the hope that it might be useful, and we can offer NO IMPLIED WARRANTY OF FITNESS. While we attempt to ensure that the data provided is accurate and up to date, we cannot be held liable for errors in data or calculations we provide or any consequence or loss resulting from the of use of the Data or tools provided by Tax-Rates.org.
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Tips For Better Address Searches
- Check the spelling of the street name
- Use “Springwood St” instead of “Spring Wood St”,
- Use “Manor Rd” instead of “Maynor Rd”,
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Are Shipping & Handling Subject To Sales Tax In Texas
In the state of Texas, the laws regarding tax on shipping and handling costs are relatively simple. Essentially, if the item being shipped is taxable, and if you charge for the shipping as part of the order, then the shipping charge is considered to be taxable. If the item is not taxable, then the shipping is not seen as being taxable either.
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