The state use tax rate is 6 or 25 percent. For Texas shoppers, depending on where they use, store, or consume the item, they may owe up to an additional 2 percent in local use taxes. Use our sales tax rate locator to determine the local tax rate in your address. Texas imposes a state sales and use tax of 6.25 percent on all retail sales, leases and rentals of most goods, as well as on taxable services.
Local tax jurisdictions (cities, counties, special-purpose districts and transit authorities) can also impose a sales and use tax of up to 2 percent, with a maximum combined rate of 8.25 percent. Consumer use tax is normally applied to taxable transactions where sales tax was not collected. A good example is a taxable online purchase where the retailer doesn't collect sales tax. Liability goes from the seller to the buyer, who can declare, file and remit full use tax on their annual Texas income tax return.
It is determined by applying the use tax rate (equal to the sales tax rate) to the purchase price of qualifying goods and services. In some cases, a purchase made out of state may be subject to a different sales tax rate than in Texas. To determine the amount of use tax due by sellers, the retailer must apply the sales tax rate to the total purchase price where the item is used, stored, or otherwise consumed. The use tax can be applied to businesses, individuals or non-profit organizations that do not have an exemption granted by the Texas Comptroller of Public Accounts and attempt to level the playing field for purchases that avoid sales tax.
The sellers' use tax applies to retailers, while the consumer use tax applies to consumers, who can be individuals or businesses.