Texas state income tax
Texas has no state individual income tax. Wages, self-employment income, capital gains, and retirement withdrawals are not taxed by Texas at the state level (federal tax still applies). The state funds itself through sales tax instead.
Does Texas have a state income tax?
No. Texas is one of the states with no individual income tax, so there is no state tax on your wages or salary. Texas has no state individual income tax, and a 2019 constitutional amendment (Art. 8, Sec. 24-a) prohibits the legislature from ever creating one.
| Item | Texas |
|---|---|
| State income tax | None |
| Capital gains tax | None (no income tax) |
| State sales tax | 6.25% (plus local) |
| Estate / inheritance tax | None |
How does Texas tax capital gains?
Texas does not tax capital gains, because it has no state income tax. You still owe federal capital gains tax. See how capital gains tax works in 2026.
What about retirement income in Texas?
Because Texas has no income tax, Social Security, pensions, and 401(k)/IRA withdrawals are all untaxed at the state level. See Texas retirement taxes for the full picture.
Sources
- Texas income tax: Texas Department of Revenue / Taxation.
- Texas capital gains treatment: Texas tax authority.
- Texas sales tax: Texas Department of Revenue.