Minimum Sales Rate Tax for 2024
| 6.25% | Column content | Column content | Column content | Column content | |
| 1% | Column content | Column content | Column content | Column content | |
| 0% | Column content | Column content | Column content | Column content | |
| Column content | Column content | Column content | Column content | ||
| Column content | Column content | Column content | Column content | ||
| Column content | Column content | Column content | Column content | ||
| Column content | Column content | Column content | Column content | ||
| Column content | Column content | Column content | Column content | ||
| 1% | Column content | Column content | Column content | Column content | |
| Rtd Greater Denver | Column content | Column content | Column content | Column content | |
| Scientific & Cultural Fac.(cd) | Column content | Column content | Column content | Column content | |
| Regional Transport Authority | Column content | Column content | Column content | Column content | |
| Minimum combined sales tax rate value | 8.25% | Column content | Column content | Column content | Column content |
| Special tax | Column content | Column content | Column content | Column content | |
| Economic sales nexus threshold | $500,000 | Column content | Column content | Column content | Column content |
| Transactions threshold | N/A | Column content | Column content | Column content | Column content |
| Sales tax return filing due date | Last day of the month following the reporting period | Column content | Column content | Column content | Column content |
The base state sales tax rate in Texas is 6.25%, but since the city-specific tax rate is 1%, the Harris County tax rate is 0% and the Houston Mta Transit tax is 1%, the minimum sales tax rate for Houston is 8.25%.
How to calculate your sales tax rate
Use our online sales tax calculator to determine the combined state and local sales tax rate for each location where you have a physical or economic nexus. Just enter your state and ZIP code to get your sales tax rate.
Looking for help calculating your sales tax? Contact us today to book a free consultation!
What is nexus?
In Houston, businesses must understand “nexus” to determine their tax obligations. Nexus refers to the connection that requires a business to collect sales tax in a state. This concept became even more important after the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., which allowed states to require sales tax collection based on economic activity rather than just a physical presence.
Specific sales tax rules for Houston
In Texas, various categories of purchases are exempt from sales tax. Government agencies at both the state and local levels are generally exempt when buying items for official use. Qualifying non-profit organizations, such as religious groups and charities, may also be exempt from sales tax on purchases made for exempt purposes. Additionally, Texas exempts essential goods, including most unprepared groceries—though this excludes restaurant meals and prepared foods—as well as prescription drugs and medical equipment. Companies engaged in manufacturing, processing, fabrication, or repair may qualify for exemptions on equipment, replacement parts, and specific materials directly used in production.
Services
Services are generally exempt but there are exceptions
Goods
Most items, such as appliances, vehicles, furniture, sporting goods, and electronics, are subject to sales tax
Clothing
Subject to sales tax
Electronics
Taxable
SaaS
Taxable
Digital Products
Subject to sales tax
Software
Pre-packaged software is taxable, custom software is not.
Freight/Shipping
Subject to sales tax when included with the sale of items.
Speak to a US sales tax expert today
Schedule a call today
