Texas local sales tax rates for restaurants in Houston, Dallas and Austin

Texas sales tax on a restaurant meal is the 6.25 percent state rate plus local tax of up to 2 percent, for a maximum combined rate of 8.25 percent. The Comptroller's city list shows Houston, Dallas and Austin each at a combined 8.25 percent. The rate depends on the address of the sale, so a restaurant just outside a city limit, or in a special district, can differ from the city's rate.

What is the Texas sales tax rate?

The Comptroller states that Texas imposes a 6.25 percent state sales and use tax on retail sales, leases and rentals of most goods and certain taxable services. Cities, counties, special purpose districts and transit authorities can add up to 2 percent, which caps the combined rate at 8.25 percent. A restaurant meal is a taxable sale of ready-to-eat food, and the guide on comped meals, coupons and takeout explains what else falls inside it.

What are the rates in the big three cities?

The Comptroller's city rate list shows the following combined rates:

• Houston (Harris, Fort Bend and Montgomery counties): a local rate of 1 percent, for 8.25 percent in total.
• Dallas (Collin, Dallas, Denton, Kaufman and Rockwall counties): 1 percent local, 8.25 percent total.
• Austin (Travis and Williamson counties): 1 percent local, 8.25 percent total.

The table covers the city as a whole. The other 1 percent of the local allowance in these cities comes from transit and special purpose districts rather than the city rate, which is why the combined figure still reaches the cap. Treat the list as a starting point, because boundaries and districts change.

Why does the address matter?

Local tax depends on where the sale is made. A restaurant at an address inside a city and a transit district pays one rate, and one a mile away, outside the district, may pay another. When a street runs along a boundary, two restaurants on opposite sides can have different rates. If you move or open a second location, check the new address before you set the register.

How do you check a rate?

The Comptroller offers a Sales Tax Rate Locator at gis.cpa.texas.gov/search/ that returns the rate for an address, and it publishes rate lists by city, county, transit authority and special purpose district. Use this routine:

1. Enter your restaurant's full street address in the locator.
2. Save or print the result with the date.
3. Compare it to the rate in your point of sale.
4. Repeat for any location and any catering address you serve often.
5. Check again each quarter, since local rates can change on January 1 and July 1.

What about delivery and catering?

The rate in Texas follows the location where the sale is made. For food you deliver, ask the Comptroller's tax help team how to treat a delivery to another jurisdiction, and keep the answer. If you cater events in several cities, build a rate table for the addresses you serve.

What does the mixed beverage tax add?

Alcohol served by the drink is subject to a separate mixed beverage tax, which the existing guide on Texas restaurant sales tax and the mixed beverage tax explains. Do not confuse the two on your returns.

What mistakes cost money?

• Using the city's rate for an address in a different district.
• Setting the rate for the first location and copying it to a second.
• Charging a different rate online than at the counter.
• Missing a rate change on January 1 or July 1.
• Treating the rate list as permanent.

What should you keep?

A dated copy of the locator result for each address, and a record of the date you changed the register. If the Comptroller ever audits, those records show you took reasonable care.

A worked example across three cities

A $60 check for dinner carries $3.75 of state tax at 6.25 percent. In a hypothetical district where local tax is only 1.5 percent, local tax adds 90 cents, for $4.65 in total. The same check in Houston, Dallas or Austin carries the full 8.25 percent, which is $4.95 in total. If your point of sale is set at the wrong rate by half a point, you under-collect 30 cents on that check, and across 40,000 checks a year that is $12,000 that your business owes from its own pocket. The sums are small per table and large per year, which is why a quarterly check of the locator is worth ten minutes.

What should a multi-location owner do?

Keep one sheet that lists every address, its combined rate, the date you checked it and who checked it. Share it with your bookkeeper. When you open a location, check the rate before you print menus with prices that include tax, such as a food truck or a stadium stand. When the Comptroller announces local rate changes, update the sheet and the register on the same day, and keep the old sheets for your audit file.

More guides for your business:

• Texas sales tax permit and filing for new restaurants
• Texas restaurant purchases, resale certificates and taxable items
• Texas comped meals, coupons and takeout: how sales tax works

More in the US guides for food businesses.