Tax Calculator Texas, United States - 2025-2026

About Texas, United States

Texas is one of seven US states with no personal income tax, meaning residents file only federal tax returns for their individual income. This tax advantage has been a primary driver of the state's explosive population and economic growth, attracting both individuals and businesses from higher-tax states. The state relies on a combination of property taxes and sales taxes to fund government services, which creates a different tax burden structure compared to income-tax states. The Texas tax system includes the state's franchise tax on businesses, motor vehicle sales tax, and various excise taxes on alcohol, tobacco, and motor fuels. Texas's reliance on sales and property taxes makes its tax system moderately regressive, meaning lower-income residents pay a higher percentage of their income in state and local taxes compared to higher-income residents, according to studies by the Institute on Taxation and Economic Policy. The state's tax structure particularly benefits high-income earners and retirees who would face substantial income taxes in other states. However, Texas has been exploring potential tax reforms in recent years, including proposals to increase the state's reliance on business taxes and discussions about the long-term sustainability of the no-income-tax model as the state's population and infrastructure needs grow.

Texas, United States Income Tax Calculator

Estimate your income tax liability for 2025-2026 in Texas, United States. Enter your income, deductions, and filing status to get an accurate tax estimate.

Tax Brackets and Rates in Texas, United States

Texas, United States tax brackets for 2025-2026 range from basic rate to top marginal rate. Our calculator applies progressive taxation with applicable deductions and credits.

Texas Key Financial Data at a Glance

Texas, United States residents and job seekers should understand the local financial landscape. The table below shows key economic indicators for Texas, including income levels, tax burdens, housing costs, and the overall cost of living index. This data helps you compare Texas with other states and make informed decisions about relocation, employment, and home buying. All figures are based on the most recent available data from the Bureau of Labor Statistics, US Census Bureau, and state revenue departments.

Texas, United States Tax Information

Texas imposes no state income tax on individuals, meaning no tax on wages, salaries, tips, commissions, interest, dividends, or capital gains. The state sales tax rate is 6.25%, and local jurisdictions including counties, cities, and transit authorities can add up to 2% for a maximum combined rate of 8.25%. Some special purpose districts may add additional increments, though the maximum combined rate is capped. Property taxes in Texas are among the highest in the nation, averaging about 1.6% of market value annually, with no statewide cap on assessed value increases. The state offers several property tax relief programs including the homestead exemption of $40,000 on school district taxes, over-65 and disabled person exemptions, and the Disabled Veterans exemption. Texas does not have a state estate or inheritance tax, and the state conforms to federal rules for business tax purposes through its franchise tax. The franchise tax (margin tax) applies to businesses with annualized total revenue exceeding $1.23 million and is calculated as the lesser of 0.375% of margin for retail/wholesale businesses or 0.75% for other businesses. Texas also imposes a motor vehicle sales tax of 6.25% on vehicle purchases.

Sources: Bureau of Labor Statistics, US Census Bureau, state revenue departments (2024). Figures are estimates and may vary by source and year.