Does Texas Have Sales Tax on Clothes: 2025 Guide for Businesses

Does Texas Have Sales Tax on Clothes?

Yes, Texas applies sales tax to clothing, with state and local rates varying by location.

Tax Type	Details
State Sales Tax	6.25% on clothing purchases
Local Sales Tax	Up to 2%, making the maximum combined rate 8.25%
Total Tax Rate	Varies by city, ranging from 6.25% to 8.25%
Sales Tax Holiday	Held annually in August, exempting qualifying clothing under $100

For example, a $100 clothing purchase in Houston (8.25% rate) incurs $8.25 in tax.

Location	Total Sales Tax Rate	Purchase Amount	Tax Charged
Houston	8.25%	$100	$8.25
Dallas	8.25%	$100	$8.25
Austin	8.25%	$100	$8.25
San Antonio	8.25%	$100	$8.25
El Paso	8.25%	$100	$8.25

Notes

• Clothing is taxable year-round except during Texas’s annual sales tax holiday in August.
• Local tax rates vary, increasing the total tax up to 8.25%.
• Resale purchases are tax-exempt with a valid resale certificate.
• Businesses must collect and remit tax to the Texas Comptroller of Public Accounts.

Sales Tax on Clothing in Texas

In Texas, most clothing items are taxable at the 6.25% state rate plus applicable local taxes (up to 8.25% total). However, certain work uniforms, protective gear, and accessories are always taxable.

Taxable Clothing Items	Examples
Accessories	Handbags, jewelry, watches, sunglasses
Specialty Footwear	Cleats, ski boots, ballet slippers
Protective Gear	Helmets, safety vests, knee pads
Formal Wear	Tuxedos, wedding gowns, costume rentals

Sales Tax Holiday Exception

During the August tax-free weekend, many clothing items under $100 are exempt, but accessories and protective gear remain taxable. Businesses must collect and remit sales tax accordingly.

Example Scenario: Sales Tax Collection for Clothing Sales in Texas

A business with a physical presence or economic nexus selling clothing in Texas must apply different tax rules depending on whether the sales tax holiday applies and whether the item qualifies for exemption.

Table: Texas Sales Tax Holiday (Example Scenarios)

Scenario	Item Price	Sales Tax Rate	Tax Collected	Reason
Clothing item under $100 during tax holiday	$80	0%	$0	Exempt during the tax-free weekend.
Clothing item above $100 during tax holiday	$120	8.25%	$9.90	Only the first $100 is exempt; the remaining $20 is taxable.
Taxable clothing item below $100 during tax holiday	$50	8.25%	$4.13	Accessories and protective gear remain taxable.
Clothing item under $100 outside tax holiday	$80	8.25%	$6.60	Fully taxable since it’s not during the tax holiday.
Clothing item above $100 outside tax holiday	$120	8.25%	$9.90	Regular clothing is always taxed outside the holiday.
Taxable clothing item below $100 outside tax holiday	$50	8.25%	$4.13	Items like handbags and safety gear are always taxable.

Notes

• Clothing under $100 is tax-free during the August tax holiday.
• Items above $100 are partially taxable—only the first $100 is exempt.
• Accessories and protective gear remain taxable year-round.
• Businesses must track exemptions, manage registration, and understand economic nexus properly to ensure accurate tax collection and compliance.

Exemptions to Clothing Sales Tax in Texas

Certain clothing sales in Texas qualify for exemptions from the 6.25% state sales tax plus local rates (up to 8.25% total). Below are key exemptions with example scenarios.

Exemption Type	Details	Example Scenario	Tax Savings (8.25%)
Sales Tax Holiday	Clothing under $100 is tax-free during Texas’s August tax-free weekend.	A customer buys a $90 shirt during the holiday.	$7.43 saved.
Resale Purchases	Retailers buying inventory for resale are exempt with a valid resale certificate.	A boutique buys $5,000 in wholesale clothing for resale.	$412.50 saved.
Nonprofit Organizations	Some 501(c)(3) charities qualify for exemptions on clothing purchases.	A nonprofit buys $2,000 worth of uniforms for volunteers.	$165.00 saved.
Government Purchases	Clothing bought for official federal, state, or local government use is exempt.	A police department buys $10,000 in uniforms for officers.	$825.00 saved.

Notes

• Retailers and nonprofits can save hundreds to thousands of dollars on bulk clothing purchases.
• Proper documentation (e.g., resale certificates, nonprofit forms, government exemption documents) is required to claim exemptions.

FAQs

What is the sales tax on clothing in Texas?

In Texas, clothing is taxed at the standard state rate of 6.25% plus local rates unless exempt during tax holidays.

Are all clothes tax free in Texas?

No, only certain clothing items are tax-free during Texas's annual sales tax holiday or if purchased for resale.

What is exempt from sales tax in Texas?

In Texas, exemptions include groceries, prescription medications, medical devices, manufacturing equipment, and items purchased for resale.

What Businesses Need to Know About Sales Tax Compliance in Texas

Texas businesses must collect and remit state (6.25%) and local (up to 8.25% combined) sales tax, maintain proper records, file timely returns, and manage exemptions to ensure compliance.

How to Qualify for Texas Clothing Sales Tax Exemptions

To qualify for a Texas clothing sales tax exemption, businesses and organizations must meet specific criteria and provide valid documentation.

Exemption Type	Qualification Requirements	Example Savings (8.25%)
Sales Tax Holiday	Purchase qualifying clothing under $100 during the annual August tax-free weekend.	$8.25 saved on a $100 item
Resale Purchases	Provide a valid Texas Sales and Use Tax Resale Certificate (Form 01-339) for inventory purchases.	$412.50 saved on $5,000 inventory
Nonprofit Organizations	Submit proof of 501(c)(3) status and use the exemption for qualifying purchases.	$165 saved on $2,000 in uniforms
Government Purchases	Purchases must be made directly by a government entity for official use.	$825 saved on $10,000 in uniforms

Required Forms for Sales Tax Compliance for Businesses in Texas

​To qualify for Texas clothing sales tax exemptions, specific forms are required based on the exemption type:

Exemption Type	Required Form	Description
Resale Purchases	Texas Sales and Use Tax Resale Certificate (Form 01-339)	Retailers purchasing inventory for resale must complete this form to certify that the items are for resale and therefore exempt from sales tax.
Nonprofit Organizations	Application for Exemption – Charitable Organizations (Form AP-205)	Nonprofit entities seeking tax-exempt status in Texas should submit this application to the Texas Comptroller to obtain exemption from sales tax on qualifying purchases.
Government Purchases	Texas Sales and Use Tax Exemption Certification (Form 01-339)	Government entities can use this form to certify their exemption from sales tax when making official purchases.

Summary: Texas Tax Rules for Retail Businesses

Retail businesses in Texas must comply with state and local sales tax regulations, including tax collection, nexus considerations, reporting, and exemption requirements, which are crucial during shopping seasons.

Requirement	Details	Example Scenario
Sales Tax Rate	State tax: 6.25% + local tax (up to 2%) = max 8.25%	A boutique in Dallas applies an 8.25% tax on sales.
Sales Tax Permit	Required for all retailers; register with the Texas Comptroller	A new store registers before making taxable sales.
Tax Collection & Remittance	Businesses must collect tax and remit it to the state based on filing frequency (monthly, quarterly, annually).	A retailer with $50,000 in sales collects $4,125 in tax.
Exemptions	Sales for resale, nonprofit organizations, and government purchases may qualify for exemption.	A store selling wholesale goods uses a resale certificate.
Sales Tax Reporting	Businesses must file sales tax returns online through the Texas Comptroller’s portal.	A retailer submits quarterly tax reports to stay compliant.
Penalties for Non-Compliance	Late or incorrect filings may result in fines, interest, or audits.	A business failing to file on time faces penalties.

Automate Sales Tax on Clothing in Texas for Your Business

Managing Texas sales tax compliance can be a nexus of complexity, from verifying local tax rates to tracking exemptions and meeting filing deadlines. Kintsugi simplifies this process with powerful automation tools designed for modern businesses.

Challenge	How Kintsugi Helps	Benefits
Taxable vs. Non-Taxable Apparel	Differentiates between taxable and exempt items (e.g., sales tax holidays).	Ensures compliance with exemptions.
Sales Tax Rate Variability	Automates state (6.25%) and local tax rate calculations for accurate total rates.	Prevents overpayment or underpayment.
Exemption Certificate Management	Tracks and validates resale certificates for wholesale apparel purchases.	Reduces audit risks and ensures proper tax collection.
Sales Tax Holidays	Automatically applies exemptions for qualifying items during tax-free periods.	Maximizes compliance during exemptions.
Reporting and Filing	Generates detailed sales tax reports for state filings.	Saves time and ensures accuracy.

Streamlining Texas State Sales Tax on Apparel

Let Kintsugi handle the complexities of Texas sales tax so you can focus on growing your business. Visit our Product Platform and Pricing pages to learn more and get started today!