Income Tax
Texas No Income Tax: The Hidden Costs in 2026
2026-02-20TaxRatesHub Editorial Team6 min
The Texas Tax Trade-Off
Texas has no state income tax, saving residents thousands annually. But the state needs revenue from other sources.
High Property Taxes
Texas has the 5th highest effective property tax rate in the US at 1.67%. On a $300,000 home, that's about $5,010 annually.
Sales Tax
Texas base rate is 6.25%, with combined rates up to 8.25% — higher than the national average.
Who Wins and Who Loses
High-income earners benefit most from no income tax. Retirees with paid-off homes may also benefit. Renters and new homebuyers face higher housing costs due to property taxes passed through by landlords.
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