Texas sales tax on invoices (2026 guide)

Texas charges a 6.25% state sales and use tax. Cities, counties, special purpose districts and transit authorities can add up to 2% more, so the combined rate is never above 8.25%.

What makes Texas different from many states is its list of taxable services. If you're a freelancer or small business, you can't assume your services are tax-free — check whether they're on the Comptroller's list.

Texas sales tax rates

Tax	Rate
State sales and use tax	6.25%
Local taxes (city, county, special purpose district, transit)	up to 2% combined
Maximum combined rate	8.25%

Local taxes depend on where the sale is consummated. The Comptroller's guide for sellers explains how to source local tax for sales from a place of business, for deliveries, and for services; use the Comptroller's rate locator to find the local rate for an address.

Which services are taxable in Texas?

Texas taxes the retail sale of most goods and a defined list of services. Examples from the Comptroller's taxable services publication include:

• Data processing — using a computer for word processing, data entry, storage or manipulation. Twenty percent of the charge is exempt, so tax applies to 80% of it.
• Information services, such as providing data or reports.
• Real property services — pest control and extermination, garbage collection, janitorial and custodial services (including parking-lot sweeping), landscaping and lawn maintenance, and surveying.
• Personal services such as massage parlors, Turkish baths and escort services (massage by licensed therapists is not included).
• Security services and several others on the Comptroller's list.

Services that aren't on the list — for example most consulting, design, legal, accounting and writing — are not subject to Texas sales tax.

If you're a web developer, IT consultant or data professional, read the data processing rules carefully: parts of your work may be taxable in Texas even if they wouldn't be elsewhere.

Getting a Texas sales tax permit

You need a Texas sales and use tax permit from the Comptroller before you sell taxable goods or services in Texas. Once you have it you:

1. collect state and local sales tax from customers,
2. file returns on the schedule the Comptroller assigns (monthly, quarterly or yearly, depending on how much tax you collect), and
3. keep records of your sales and the tax you collected.

What a Texas sales tax invoice should show

• your business name and address,
• the customer's name and address,
• a unique invoice number and the invoice date,
• a description and price for each item or service,
• sales tax as a separate line, with the rate you applied, and
• the total due.

If an invoice mixes taxable and non-taxable services, keep them on separate lines — and remember the 20% exemption on data processing when you work out the taxable amount. In Invoice Native, tick Tax only on the taxable lines.

Resale certificates

A business buying items to resell gives you Form 01-339, Texas Sales and Use Tax Resale Certificate. When you accept a properly completed certificate, the sale is exempt from sales tax.

Two points from the Comptroller's resale FAQ are worth remembering:

• A customer's permit number or a copy of their permit is not a substitute for the certificate.
• Keep resale certificates with your records for four years; they're your evidence of why tax wasn't collected.

Other exempt customers — such as qualifying nonprofits and government agencies — use exemption certificates instead. See how to invoice a tax-exempt customer.

A worked example

Suppose you're an IT consultant in Austin, where the combined rate is 8.25%, and you invoice:

• $2,000 for strategy consulting (not on the taxable list), and
• $500 for data processing — cleaning and loading a client's data.

Only the data processing is taxable, and only on 80% of its price: $500 × 80% = $400 taxable, and $400 × 8.25% = $33.00 in tax. The invoice total is $2,533.00. Putting the two services on separate lines, and noting the 20% exemption, shows the client exactly how the tax was worked out.

Selling to customers in other states

If you ship goods or deliver taxable services to customers in another state, that state's rules may apply instead of Texas's. Since the Supreme Court's 2018 decision in South Dakota v. Wayfair, states can require out-of-state sellers to register and collect their sales tax once sales into the state pass a threshold the state sets. If you sell across state lines regularly, check the thresholds and registration rules of each state you sell into — and use that state's rate on those invoices.

Common mistakes on Texas invoices

• Assuming services are never taxed. Check the Comptroller's taxable services list for your work.
• Taxing the full data processing charge instead of 80% of it.
• Accepting a permit number instead of a resale certificate.
• Charging more than 8.25% combined — local taxes are capped at 2%.
• Not keeping certificates for four years.

Quick checklist for Texas invoices

• ✅ Sales and use tax permit before your first taxable sale
• ✅ Checked whether your services are on the taxable list
• ✅ Correct local rate (combined rate no higher than 8.25%)
• ✅ Taxable and non-taxable lines separated
• ✅ Resale certificates (Form 01-339) on file for four years