Taxes in Texas


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Texas - State

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$0.32 per gallon
Diesel Tax$0.32 per gallon
Cigarette Tax$1.41 per pack
Income Tax0%
Effective Tax Rate:0%
Property Tax1.80%
Social Security TaxNone
Medical/Dental Deduction:Yes
Federal Income Tax Deduction:None
Retirement TaxNone
State Taxes in Texas

Texas State Taxes 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 Taxes

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 $40,000. 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: Here Are the Best Cities to Retire in Texas

Texas Estate and Inheritance Taxes

There is no inheritance tax or estate tax in Texas.

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

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