Does Texas Have State Income Tax? What Texans Pay in 2026

Does Texas have state income tax? No. Texas is one of nine states that charges no state income tax on personal earnings. This means your paycheck in Texas is only reduced by federal income tax, Social Security, and Medicare — no state withholding.

What Taxes Does Texas Have?

While there’s no state income tax, Texas isn’t tax-free. The state generates revenue through:

Sales tax: 6.25% state rate + local additions, averaging 8.19% combined. That’s among the highest in the nation.

Property tax: Texas has one of the highest effective property tax rates at ~1.60%. On a $350,000 home, that’s approximately $5,600/year — significantly higher than states like Hawaii (0.28%) or Alabama (0.39%).

Franchise (margin) tax: Businesses with revenue over $2.47 million pay 0.375%–0.75%.

How No Income Tax Affects Your Take-Home Pay

The impact is significant. On a $75,000 salary (single filer), here’s how Texas compares:

State	State Tax	Annual Net	Per Paycheck (bi-weekly)
Texas	$0	~$61,300	~$2,358
Illinois (4.95%)	~$3,571	~$57,750	~$2,221
California (up to 13.3%)	~$3,500	~$57,800	~$2,223
New York (up to 10.9%)	~$3,700	~$57,600	~$2,215

Texas workers take home roughly $3,500 more per year than comparable workers in states with moderate income taxes. Use our Texas paycheck calculator for your exact numbers.

All 9 States With No Income Tax

1. Alaska — no income tax, no state sales tax
2. Florida — no income tax, 6% sales tax
3. Nevada — no income tax, 6.85% sales tax
4. New Hampshire — no income tax on wages (taxes interest/dividends above $2,400)
5. South Dakota — no income tax, 4.2% sales tax
6. Tennessee — no income tax (eliminated Hall Tax in 2021)
7. Texas — no income tax, 6.25% sales tax
8. Washington — no income tax, 6.5% sales tax
9. Wyoming — no income tax, 4% sales tax

Pros and Cons of No State Income Tax

Pros: Higher take-home pay, simpler tax filing (no state return for income), attractive for high earners.

Cons: Higher sales and property taxes to compensate, regressive tax structure (impacts lower earners proportionally more), less state revenue for services.

FAQs

Does Texas have any income tax?

No. Texas has no state income tax on individual wages, salaries, or other personal income. Texas also has no corporate income tax, though it does have a franchise (margin) tax on larger businesses.

What is the sales tax in Texas?

The Texas state sales tax rate is 6.25%. With local additions, the average combined rate is about 8.19%. Some areas, particularly in larger cities, can reach up to 8.25%.

Why are Texas property taxes so high?

Texas relies heavily on property taxes to fund local services (schools, roads, fire departments) because there’s no state income tax. The average effective rate is about 1.60%, among the highest nationally. Homestead exemptions can reduce the burden.

Is Texas a good state to live in for taxes?

For high earners, yes — no state income tax means thousands more in annual take-home pay. However, high property taxes and sales taxes offset some of the savings, especially for homeowners. Renters and high-income earners benefit most.

How does Texas compare to Florida for taxes?

Both have no state income tax. Florida’s sales tax is slightly lower (6% state vs. 6.25% in Texas). Florida’s average property tax is also lower (~0.82% vs. ~1.60%). Overall, Florida has a slightly lower total tax burden for most residents.

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Try our Texas Paycheck Calculator → See your exact take-home pay in Texas after federal taxes, Social Security, and Medicare.