For the full state income tax comparison and relocation planning framework, see the State Taxes hub.
Texas has no state income tax — but makes up for it with higher property and sales taxes. Here’s what you need to know.
Texas Tax Overview
| Tax Type | Rate | Notes |
|---|---|---|
| State Income Tax | 0% | None |
| Property Tax | Confirm current average (historically among the highest in the US) | See Texas Property Tax Guide |
| Sales Tax | 6.25% + local | Up to 8.25% total in most areas |
| Gas Tax | Confirm current per-gallon rate | — |
No State Income Tax
Texas is one of nine states with no state income tax:
- Texas
- Florida
- Nevada
- Washington (has a separate capital gains excise tax on high earners)
- Wyoming
- South Dakota
- Tennessee
- Alaska
- New Hampshire (no income tax of any kind since its former interest/dividends tax was fully repealed effective January 1, 2025)
What This Means for Your Paycheck (Illustrative)
Confirm current figures with each state’s dedicated calculator before relying on precise dollar amounts, as this table is illustrative:
| Salary | TX Take-Home (approx.) | CA Take-Home (approx.) | Illustrative Difference |
|---|---|---|---|
| $75,000 | Confirm current figure | Confirm current figure | Several thousand dollars |
| $100,000 | Confirm current figure | Confirm current figure | Several thousand dollars |
| $150,000 | Confirm current figure | Confirm current figure | Over $10,000 |
| $200,000 | Confirm current figure | Confirm current figure | Well over $10,000 |
See the Texas Income Tax Calculator and California Income Tax Calculator for precise current-year figures at your specific income level.
High earners generally save significantly by living in Texas vs. high-tax states, though the exact amount depends on your specific income and deductions.
Texas Property Tax
Texas has historically had some of the highest property taxes in the nation to compensate for no income tax. Confirm current county-level effective rates with the Texas Comptroller or your county appraisal district — see the Texas Property Tax Guide for details, as this session did not independently re-verify county-by-county figures.
Property Tax Exemptions
| Exemption | Savings |
|---|---|
| Homestead exemption | Confirm current amount off school district taxes |
| Over 65 exemption | Additional exemption (confirm current amount) |
| Disabled veteran | Up to 100% exemption |
| Optional local exemptions | Varies by county |
The homestead exemption meaningfully reduces the average homeowner’s annual property tax bill — confirm the current typical savings amount, as home values and exemption amounts change over time.
Texas Sales Tax
| Component | Rate |
|---|---|
| State sales tax | 6.25% |
| Local tax (max) | +2% |
| Maximum combined | 8.25% |
Most major Texas cities charge at or near the maximum 8.25%.
Sales Tax Exemptions
| Item | Taxed? |
|---|---|
| Groceries (unprepared food) | No |
| Prescription drugs | No |
| Clothing | Yes |
| Electronics | Yes |
| Restaurant meals | Yes |
| Vehicles | Yes (6.25%) |
Texas vs. Other States: Total Tax Burden
Confirm current rankings and figures with the Tax Foundation before relying on a specific rank, as these shift year to year and this session did not independently re-verify a current ranking:
| State | Income Tax | Property Tax (confirm current) | Sales Tax (confirm current) |
|---|---|---|---|
| Texas | 0% | Historically among the highest | Up to 8.25% |
| California | 13.3% | Historically well below average | Confirm current combined rate |
| New York | 10.9% | Historically above average | Confirm current combined rate |
| Florida | 0% | Historically moderate | Confirm current combined rate |
| Nevada | 0% | Historically low | Confirm current combined rate |
Despite no income tax, Texas has historically ranked closer to the middle for total tax burden because of high property taxes — confirm the current ranking before citing a specific number.
Who Benefits Most from Texas Taxes?
Texas taxes favor:
- High-income earners (no income tax saves the most)
- Renters (avoid high property taxes)
- Retirees receiving pensions/Social Security
- Business owners with high profits
- Tech workers with stock compensation
Texas taxes hurt:
- Homeowners (high property tax)
- Large families (property + sales tax)
- Low-income earners (regressive sales tax)
- Those buying expensive vehicles
Texas Franchise Tax (Business)
If you run a business in Texas, revenue below a set threshold owes no franchise tax, with rates applying above that threshold that vary by business type (generally lower for retail/wholesale than other businesses). Confirm the current revenue threshold and rates with the Texas Comptroller, as these were not independently re-verified this session.
Retirement Income in Texas
| Income Type | State Tax |
|---|---|
| Social Security | Not taxed |
| Pensions | Not taxed |
| 401(k)/IRA withdrawals | Not taxed |
| Investment income | Not taxed |
Texas is excellent for retirees — no state taxes on any retirement income.
Moving to Texas: Tax Savings (Illustrative)
Use the Texas Income Tax Calculator and your target state’s dedicated guide to compute your specific net savings, factoring in both income tax savings and any property tax increase, rather than relying on a fixed historical estimate — several states’ income tax rates changed for 2026, and property values vary widely by market.
Texas Tax Calendar
| Deadline | What’s Due |
|---|---|
| April 15 | Federal income tax |
| January 31 | Property tax due |
| Quarterly | Estimated federal taxes (if applicable) |
No state income tax filing required!
Tips for Texans
- Claim homestead exemption immediately — meaningful annual savings
- Protest property tax annually — values are often contestable
- Consider renting if mobile — avoids high property tax
- No state return needed — one less filing headache
- Watch local sales taxes — budget for up to 8.25% in cities
Texas vs. Florida (Both No Income Tax)
Confirm current property tax and sales tax figures for both states before relying on this comparison, as these were not independently re-verified this session:
| Factor | Texas | Florida |
|---|---|---|
| Income tax | 0% | 0% |
| Property tax | Historically higher | Historically lower |
| Sales tax | Up to 8.25% | Confirm current maximum |
| Homestead exemption | Confirm current amount | Confirm current amount |
Florida has historically had lower property taxes, making it more tax-friendly overall for homeowners — confirm current figures before relying on this comparison.
Bottom Line
Texas’s no state income tax saves high earners meaningfully each year, but high property taxes offset some savings for homeowners. Overall, Texas has historically ranked closer to the middle for total tax burden. Best for: high earners, renters, and retirees. Less ideal for homeowners with expensive properties.
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy