What Is the Sales Tax in Dallas, Texas?

Sales tax is a consumption tax applied to the sale of goods and certain services. When you purchase an item, the sales tax is added to the price, making it a direct contribution to state and local revenue streams that fund public services and infrastructure.

Dallas Sales Tax Rate Breakdown

The combined sales tax rate in Dallas, Texas, is 8.25%. The statewide sales and use tax rate in Texas is 6.25%.

Local taxing jurisdictions can impose additional sales and use taxes up to a maximum of 2%. In Dallas, the city levies a 1% sales tax. The Dallas Area Rapid Transit (DART) transportation authority also collects a 1% sales tax, which funds the regional public transportation system.

Combining these rates—6.25% state, 1% city, and 1% DART—results in the total 8.25% sales tax rate applied to most taxable purchases within Dallas. This combined rate represents the maximum allowed by Texas law for state and local taxes. Retailers collect the total sales tax and forward it to the Texas Comptroller’s office, which distributes the local portions.

Taxable Goods and Services

Sales tax in Texas generally applies to the retail sale, lease, and rental of most tangible personal property. This includes everyday items such as clothing, electronics, home furnishings, appliances, and sporting equipment. Digital products like downloaded music or e-books are also considered taxable.

Certain services are also subject to sales tax in Texas. These include amusement services, cable television services, data processing services, car repair, laundry and cleaning services, and certain real property repair or remodeling services. Shipping charges associated with the sale of a taxable item are generally also subject to sales tax.

Common Sales Tax Exemptions

While many goods and services are subject to sales tax, Texas law provides specific exemptions for certain categories. Most unprepared food items, commonly referred to as groceries, are exempt from sales tax. This includes fresh fruits, vegetables, meat, dairy products, and canned goods purchased for home consumption. However, prepared food, hot food, candy, and soft drinks are typically taxable.

Prescription drugs and many medical devices are also exempt from sales tax, including items such as insulin, diabetes testing supplies, prosthetics, and prescription eyeglasses. Additionally, certain sales by or to specific organizations, such as government entities and qualifying non-profit educational or religious groups, may also be exempt.

Sales Tax on Online Purchases and Use Tax

Sales tax rules for online purchases involve the concept of economic nexus, which determines when an out-of-state seller must collect Texas sales tax. A remote seller establishes economic nexus in Texas if their gross revenue from sales to Texas customers exceeds $500,000 in the preceding 12 calendar months. This revenue threshold includes sales of both taxable and non-taxable items. Once this threshold is met, the out-of-state seller is required to register with the Texas Comptroller and collect Texas sales tax on all taxable sales to customers in the state.

When an out-of-state seller does not collect Texas sales tax on a taxable purchase, the responsibility for paying the tax shifts to the consumer through a use tax. Use tax is a complementary tax to sales tax, imposed on the storage, use, or consumption of taxable items in Texas when sales tax was not paid at the time of purchase. The state use tax rate is also 6.25%, and local use taxes can add up to an additional 2%, mirroring the sales tax rates. Consumers who purchase taxable goods from out-of-state or out-of-country sellers and bring them into Texas are obligated to report and pay this use tax directly to the Texas Comptroller’s office.