Are Leases and Rentals subject to sales tax?
While Texas' sales tax generally applies to most transactions, certain items have special treatment in many states when it comes to sales taxes. This page describes the taxability of leases and rentals in Texas, including motor vehicles and tangible media property. To learn more, see a full list of taxable and tax-exempt items in Texas.
In the state of Texas, any leases lasting for greater than one hundred and eighty days are considered to be exempt from the general sales and use tax, but will be subject to any motor vehicle sales and use tax. Any rentals for less than thirty days are considered to be subject to a gross rental receipts tax at the rate of 10%. It must be noted that for rentals lasting longer than thirty days, the rate will be 6.25%.
Tangible Media Property
Sales of tangible media property are subject to sales tax in Texas.
Back to Texas Sales Tax Handbook