Texas local sales tax changes in 2026

Key points

• Some Texas destinations will have new combined local rates starting January 1, 2026.
• Changes are driven by transit district updates, annexations, and newly defined combined areas.
• Sellers should verify rate logic before processing January 2026 transactions.

What’s changing

• The Comptroller notice reflects transit district changes, annexed areas, and updated combined areas, which can alter the total local rate for specific addresses even when a citywide rate does not change.
• Effective date: January 1, 2026.

Who this affects

• Sellers with physical locations in affected Texas jurisdictions
• Remote sellers collecting Texas local sales tax
• Ecommerce sellers shipping to Texas addresses
• Businesses operating in areas with overlapping local districts
• CPAs and accountants managing Texas sales tax compliance

Next steps for sellers

• Confirm your calculation logic applies the updated Texas city, transit district, and combined area rates starting January 1, 2026.
• Review destinations where overlapping districts can change the total rate at the address level.
• Ensure returns for January 2026 reporting periods reflect the updated local rates where applicable.

If you use TaxCloud

TaxCloud automatically updates its sales tax calculation engine for Texas local, district, and combined area rate changes, reducing the risk for ecommerce businesses of charging incorrect tax when updates take effect.