Texas Tax Guide 2026

Texas Income Tax Overview

Texas is one of nine states with no state income tax, making it one of the most attractive states for wage earners in the US. Workers in Texas owe only federal income tax on their wages — keeping significantly more of each paycheck compared to residents of high-tax states like California (13.3%) or New York (10.9%). For a Texas resident earning the state median income of $67,321, the absence of state income tax saves approximately $3,433 per year compared to paying the national average state income tax rate.

Texas Sales Tax Rate 2026

Texas's combined sales tax rate is 8.19%, which includes a state rate plus an average local rate. On a $100 purchase, you pay $8.19 in sales tax — and $40.95 on a $500 purchase. Rates can vary within the state based on county and city jurisdiction.

Property Taxes in Texas

Texas homeowners pay an effective property tax rate of 1.60% annually. On the Texas median home price of $335,000, that means approximately $5,360 per year — or $447 added to your monthly mortgage payment. Texas's property taxes are among the highest in the US, which is an important consideration when comparing the cost of homeownership across state lines.

Total Tax Burden for Texas Residents

When calculating the total tax burden for a Texas household earning $67,321 annually, you must add: federal income tax (approximately $8,079), FICA taxes (7.65% = $5,150), zero state income tax, and property taxes if you own a home. Use the specific calculators above to get your exact personalized numbers based on your income, filing status, and situation.

Tax Tips for Texas Residents in 2026

• No state income tax withholding on your paycheck — your W-4 only covers federal taxes
• Consider a Traditional IRA or 401(k) to reduce federal taxable income since you can't reduce state tax
• Watch out for Texas's relatively high property taxes when budgeting for homeownership
• Sales tax of 8.19% applies to most purchases — factor this into your budget