Texas Tax Guide
0%state income tax
Texas is the largest no-income-tax state and has attracted massive corporate relocations and population growth. The state's constitution prohibits an income tax. However, Texas has some of the highest property taxes in the nation, which fund local schools and services.
Texas Tax at a Glance
Income Tax
None
No state income tax
Sales Tax
6.25%
State-level rate
Property Tax
1.8%
64% above the national average
Estate Tax
No
No state estate tax
How Texas Compares to the National Average
Notable Tax Facts
- No state income tax — constitutionally prohibited since 2019 (voters approved amendment)
- Property taxes are among the highest in the nation at ~1.80%
- Has attracted major corporate relocations (Tesla, Oracle, HP, Caterpillar)
- No estate or inheritance tax
- Annual property tax bills of $5,000-$15,000+ are common on median-priced homes
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Texas Tax FAQ
Does Texas have income tax?
No. Texas has no state income tax. In 2019, voters approved a constitutional amendment prohibiting a personal income tax, making it nearly impossible to implement one.
Why are Texas property taxes so high?
Without income tax revenue, Texas relies heavily on property taxes to fund schools, roads, and local services. The effective rate of about 1.80% is among the highest nationally.
Is Texas actually low-tax?
It depends on your situation. High-income earners save significantly with no income tax. But middle-class homeowners may pay more in property taxes than they'd save on income taxes. The 'Texas vs. California' debate is nuanced.
How does Texas attract so many companies?
No income tax for employees, no corporate income tax, lower cost of living, business-friendly regulations, and a large skilled workforce make Texas attractive for corporate relocations.
Does Texas have a sales tax?
Yes. Texas has a 6.25% state sales tax. Local jurisdictions can add up to 2%, bringing the maximum combined rate to 8.25%.
Compare With Other States
Other No-Income-Tax States
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Educational content, not tax advice. Tax rates are approximate and subject to change. Consult a qualified CPA or tax professional for advice specific to your situation. Data reflects widely-known public information as of early 2026.