Texas Tax Policy & Rates 2026
Income tax, sales tax, property tax, and overall tax burden for Texas in 2026, with political context.
Yes
No Income Tax
None
Income Tax Rate
#32
Tax Burden Rank (1=highest)
#45
Property Tax Rank (1=highest)
Tax Policy Overview
Texas has no income tax but very high property taxes — one of the highest in the nation. The state funds public education through property taxes, creating pressure on homeowners. The franchise tax on business gross receipts generates revenue. Texas voters approved property tax relief measures in 2023.
Key Tax Rates
| Tax Type | Rate / Status |
|---|---|
| Income Tax | None |
| No Income Tax | Yes |
| Sales Tax | 6.25% (+local up to 8.25%) |
| No Sales Tax | No |
| Corporate Tax | Franchise Tax (gross receipts) |
| Property Tax Rank | #45 nationally (1=highest) |
| Overall Tax Burden Rank | #32 nationally (1=highest) |
Political Context
Texas no-income-tax model attracts businesses and wealthy individuals. But property taxes — essential for school funding — are very high. Governor Abbott has made property tax reduction a top priority, passing $18 billion in relief. The no-income-tax model requires high property taxes to fund schools, a structural tension.