Texas: Sales Tax Handbook
What purchases are exempt from the Texas sales tax?
While the Texas sales tax of 6.25% applies to most transactions, there are certain items that may be exempt from taxation. This page discusses various sales tax exemptions in Texas.
Sales Tax Exemptions in Texas
In Texas, certain items may be exempt from the sales tax to all consumers, not just tax-exempt purchasers.
An example of an item which is exempt from Texas sales tax are items which were specifically purchased for resale.
Many states have special, lowered sales tax rates for certain types of staple goods - such as groceries, clothing and medicines. Restaurant meals may also have a special sales tax rate. Here are the special category rates for Texas:
Clothing
6.25%
Groceries
EXEMPT
Prepared Food
6.25%
Prescription Drugs
EXEMPT
OTC Drugs
EXEMPT
These categories may have some further qualifications before the special rate applies, such as a price cap on clothing items. Groceries are generally defined as "unprepared food", while pre-prepared food may be subject to the restaurant food tax rate.
Candy and soda may be included or excluded from any preferential tax rate depending on whether or not the state considers them to be a "grocery":
Candy is NOT considered a grocery in Texas
Soda is NOT considered a grocery in Texas
Are services, shipping, installation, etc taxable in Texas?
The taxability of transactions involving services, shipping, and installation of tangible goods can be slightly complicated with various laws applying to slightly different situations. To learn more about how these transactions, and other more complicated situations, are subject to the Texas sales tax see the Texas sales taxability FAQ page.
Other tax-exempt items in Texas
This table lists a number of additional categories of goods and services that are exempt from Texas' sales tax. For a list that also shows taxable items, see the list of taxable and nontaxable items in Texas.
| Category | Exemption Status |
|---|---|
| Food and Meals | |
| Grocery Food | EXEMPT |
| Leases and Rentals | |
| Motor Vehicles | EXEMPT * |
| Manufacturing and Machinery | |
| Machinery | EXEMPT |
| Raw Materials | EXEMPT * |
| Utilities & Fuel | EXEMPT * |
| Medical Goods and Services | |
| Medical Devices | EXEMPT * |
| Medical Services | EXEMPT |
| Medicines | EXEMPT |
| Newspapers and Magazines | |
| Newspapers | EXEMPT |
| Occasional Sales | |
| General Occasional Sales | EXEMPT |
| Motor Vehicles | EXEMPT * |
| Optional Maintenance Contracts | |
| Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts | EXEMPT |
| Services | |
| Transportation Services | EXEMPT |
| Trade-Ins | |
| General Trade-Ins | EXEMPT |
* See notes in category taxability page for details
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