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Taxes in Texas

From no income or inheritance taxes to some of the highest property taxes in the country, Texas offers strong retirement tax advantages on income but shifts a larger burden onto property ownership and everyday purchases.

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Lauren Hamer
Sr. Editor

Lauren is a Certified Financial Education Instructor℠ (CFEI®) with more than a decade of experience covering senior-related issues, retirement planning, personal finance, and consumer protection. She is passionate about helping seniors and their families make informed decisions. Her work has been published on Credible, Angi, ConsumerAffairs, and more.
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Jeff Smith
Sr. Content Manager

As Retirement Living’s senior content manager, Jeff oversees the product and publishing of all retirement, investing, and consumer wellness content on the site. His extensive expertise in brand messaging and creating data-driven stories helps position Retirement Living as a top authority for senior content and community resources.

Updated:

At a glance:

  • Texas has no state income, inheritance, or estate tax, making it attractive for retirees on fixed income.
  • Property taxes are among the highest in the nation, though exemptions exist for seniors, veterans, and disabled homeowners.
  • Sales taxes are moderate-to-high and apply broadly, with local add-ons increasing the overall rate.

Texas does not levy an income tax at all — which is a good thing considering the state levies steep fees on several other common goods. Below, we explain various Texas state taxes affecting retirement income, such as sales tax, inheritance tax, and property taxes.

For information regarding taxes in other states, see Retirement Taxes by State.

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Texas Tax Rates

State Sales Tax6.25%
Avg State/Local Sales Tax8.20%
Gas Tax$0.20 per gallon
Diesel Tax$0.20 per gallon
Cigarette Tax$1.41 per pack
Income Tax0%
Effective Tax Rate0%
Property Tax1.47%
Social Security TaxNone
Medical/Dental DeductionYes
Federal Income Tax DeductionNone
Retirement TaxNone
State Taxes in Texas

Texas Tax Rates Explained

Texas Sales Tax

6.25% (groceries and prescription and over-the-counter drugs exempt); local taxes add up to an additional 2%.

Texas Income Tax

Texas does not impose a state income tax.

Texas Property Taxes

Property taxes in Texas are among the highest in the country. The effective rate is 1.80%, or an average of $3,099 on the median home value of $172,500. Texas helps seniors offset the cost of property taxes with a homestead exemption and exemptions for senior citizens, disabled individuals, veterans and surviving spouses of disabled veterans.

The Texas Homestead Exemption amounts to $100,000 for school district property taxes. Homeowners aged 65 or older or with a disability receive an additional exemption of $10,000. Some taxing districts provide an additional exemption.

Disabled veterans living in Texas qualify for an exemption of up to $12,000. The amount of the tax break depends on age and VA disability rating. Vets qualifying for the highest exemptions are: 70% disabled, or at least 65 with a disability rating of at least 10%, or blind in one or both eyes or lost one or more limbs. A disabled veteran’s surviving spouse is entitled to the exemption the veteran had at the time of death unless the spouse remarries. An exemption is also offered to a surviving spouse and minor children of an active-duty member who dies while serving.

Texas Retirement Taxes

Texas does not tax retirement income.

You can deduct medical expenses only if costs exceed 7.5% of your adjusted gross income (AGI).

Read more: The Best Cities to Retire in Texas

Texas Inheritance and Estate Taxes

There is no inheritance tax or estate tax in Texas.

For general information on Texas taxes, visit the Texas Comptroller website.