2024 Guide to Sales Tax in Houston, Texas

Texas Sales Tax Rate
Harris County Tax Rate
Special Sales Tax Rate
Houston Sales Tax Rate

If you sell remotely to customers in Houston or Harris County, you might be wondering whether you need to collect Houston sales tax and, if so, what the sales tax rate is. This article will break down all the important things you need to know about sales tax in Houston, Texas.

We’ll explain the difference between the Harris County sales tax rate and the sales tax rates in individual cities within the county, how to calculate sales tax in Houston, and help you figure out if your business needs to charge sales tax. We’ll even share the sales tax rates in the top 10 most populated zip codes in Houston and walk you through easy ways to ensure you remain sales tax compliant in Houston.

What is the Sales Tax in Houston?

Houston has a combined sales tax rate of 8.25%. In Texas, the sales tax rate can be made up of three different sales tax rates:

  • The Texas state sales tax rate: 6.25%
  • Harris County sales tax rate: 0%
  • Special sales tax rates: 2% (for district-wide initiatives and local municipalities)

What is Harris County Sales Tax?

Harris County’s sales tax rate is 0%. However, often county sales tax rates are lower than the sales tax rate charged in cities within that county. That’s because some cities might charge additional rates or be subject to a special tax rate that only applies to certain cities in that county.

Tax Rates in Houston, Texas

Wondering how much sales tax rates vary in Houston? Here’s a list of the top 10 zip codes in Houston and the sales tax rates they charge by zip code.

Zip Code State Sales Tax County Sales Tax City Sales Tax Special Sales Tax
77001 6.25% 0% 1% 1%
77002 6.25% 0% 1% 1%
77003 6.25% 0% 1% 1%
77004 6.25% 0% 1% 1%
77005 6.25% 0% 1% 1%
77006 6.25% 0% 1% 1%
77007 6.25% 0% 1% 1%
77008 6.25% 0% 1% 1%
77009 6.25% 0% 1% 1%
77010 6.25% 0% 1% 1%

Other Tax Rates for Houston

We’ve now shared the main tax rates for Houston. Here are some other tax rates that you might have to charge in that city and state.

Type of Sales Tax Rate
Non-Nexus Sellers – State Use Tax 6.25%
Non-Nexus Sellers – County Use Tax 0%
Non-Nexus Sellers – City Use Tax 1%
Non-Nexus Sellers – Special Use Tax 1%
Out-of-State Sellers – State Use Tax 6.25%
Out-of-State Sellers – County Use Tax 0%
Out-of-State Sellers – City Use Tax 1%
Out-of-State Sellers – Special Use Tax 1%
Marketplace Facilitators – State Sales Tax 6.25%
Marketplace Facilitators – County Sales Tax 0%
Marketplace Facilitators – City Sales Tax 1%
Marketplace Facilitators – Special Sales Tax 1%

What Items are Taxable in Houston?

In Texas, not all items are taxable. For example, in many states, prescription drugs are exempt from sales tax. The best way to ensure you’re charging taxes on the right items is to add a Tax Information Code (TIC) to all the items you’re selling so that the correct tax is charged. A TIC is a number assigned to a category of goods or services.

Here is a list of some of the things that are taxable in Houston:

Item Description TIC Number
Clothing General apparel 10010
Electronics Consumer electronics 20020
Furniture Household furniture 30030
Prepared Foods Ready-to-eat meals 40040
Toys Children’s toys 50050

What Items are Exempt from Taxes in Houston?

In Texas, there are several items that are exempt from taxes. States typically make items tax-exempt to encourage their purchase or because the items are essentials.

The easiest way to make sure you don’t accidentally charge sales tax on an item that’s exempt is to add a Tax Information Code (TIC) to all your items. A TIC is a number that groups similar goods or services into one category.

Here is a list of some of the things that are tax-exempt in Houston:

Item Description TIC Number
Prescription Drugs Medications 60060
Educational Materials School books 70070
Grocery Staples Unprepared food items 80080
Medical Equipment Health devices 90090

Who Needs to Collect Sales Tax in Houston?

A business only needs to collect sales tax in Houston if they have either achieved physical nexus or economic sales tax nexus in Texas.

Physical Nexus in Texas: Physical nexus in Texas means that your business has a physical presence of some kind in the state. This includes having headquarters, a satellite office, a warehouse, a distribution center, a showroom, or any other form of physical location. Having affiliates, employees, or rented/leased property in Texas can also establish physical nexus.

Economic Nexus in Texas: Even without a physical presence, businesses can establish economic nexus in Texas by making a certain amount of sales to residents of Texas. The threshold is $500,000 in sales in a year.

How to Get a Sales Tax Permit in Houston

If you reach either physical or economic nexus, you’ll need to get a sales tax permit in Texas. Getting your sales tax permit is easy and free. Here are the steps:

  1. Go to the Texas Comptroller of Public Accounts website.
  2. Answer a few questions about your business.
  3. Allow the wizard to identify what permits you need and register you for them.

How to Charge the Right Amount of Sales Tax in Houston

To ensure you charge the correct sales tax rate in Houston:

  • Manually check and input rates: Check the state’s website for updates on sales tax rates.
  • Use a sales tax compliant software solution: Automate sales tax management with software like TaxCloud.

How to File and Remit Sales Tax in Houston

If you have sales tax nexus in Texas, you can collect sales taxes from across the state and file just one state-wide return. The Texas Comptroller’s office will then remit those funds to the appropriate city, district, or county.

By following these guidelines, you can ensure that you remain compliant with Houston’s sales tax regulations, helping you avoid penalties and focus on growing your business. For more detailed information, refer to the Texas Comptroller of Public Accounts website.

This content page should help businesses understand the sales tax requirements in Houston, ensuring they remain compliant and efficient in their tax collection and remittance processes.