Texas Sales Tax on Digital Products (2026)

Last reviewed: August 15, 2026 — tax law changes; verify with the Texas Comptroller of Public Accounts

Selling ebooks, courses, templates, or software to buyers in Texas? Plan on collecting: as of August 2026, Texas taxes most digital products — downloads are treated like their physical counterparts, and SaaS is a "data processing service" with its own 80/20 quirk.

The quick answer

As of August 2026, Texas does tax most digital products. The operating principle, as TaxJar's state-by-state digital products guide summarizes it: a digital item is taxable if the same item would be taxable sold in physical form — electronic delivery does not change its tax status. Ebooks, music, photos, and digital art downloads are generally taxable, just as the printed book or CD would be.

Software and SaaS take a different route to the same destination. The Comptroller's Taxable Services publication lists data processing services — a category that explicitly includes software as a service — among Texas's taxable services, with a twist: 20 percent of the charge is exempt from tax, so tax is due on 80 percent. The amended data processing rule (34 TAC 3.330) took effect April 2, 2025, per Grant Thornton's analysis — if your product sits near that line, check the current rule text with the Comptroller.

Streaming is taxable too: the same publication lists streaming video programming under cable television services and online games under amusement services.

What's taxable and what isn't

The table below summarizes Texas's general treatment by category, as of August 2026. Texas taxes by analogy (would the physical version be taxable?) and by service category — the Comptroller has the final word on classification.

The pattern to remember: Texas asks "what would this be offline?" A download inherits the taxability of its physical twin; a cloud tool inherits the data-processing rules. Very little escapes both nets.

Rates

• State rate: 6.25% — per the Comptroller's sales and use tax page.
• Local rates: up to 2%, for a maximum combined 8.25% — the actual rate depends on the buyer's location, so there is no single "Texas rate" to hard-code.
• Remote sellers can elect a single local use tax rate instead of tracking every local jurisdiction — 1.75 percent as of this writing, published in the Texas Register by January 1 each year per the Comptroller's remote sellers page. Texas-based businesses cannot use it.
• The 80/20 rule for data processing and information services — 20 percent of the charge is exempt, so the rate applies to 80 percent of the price. Checkout math has to apply the exemption before the rate.

Economic nexus: when remote sellers must register

Since South Dakota v. Wayfair (2018), states can require out-of-state sellers to collect based on sales volume alone. Texas set its bar well above the pack: per the Comptroller's remote sellers page, a remote seller must register and collect once it has $500,000 in gross revenue from taxable and nontaxable sales into Texas in the preceding twelve calendar months, with no transaction-count threshold.

The measure is gross revenue — exempt sales count toward the $500,000 — and the twelve-month window is rolling, not a calendar year. Once over the safe harbor, you must obtain a permit and begin collecting no later than the first day of the fourth month after the month you crossed it. Texas-based sellers have physical nexus from day one and owe collection regardless of volume.

Marketplace facilitator rules

Texas requires marketplace providers to collect, report, and remit state and local sales and use tax on all sales made through the marketplace, per the Comptroller's marketplace providers and sellers page. If the marketplace certifies it collects on your behalf, you are not responsible for tax on those sales, but must keep records of them for at least four years.

The permit question splits by where you sit. A remote seller that sells only through marketplaces that have certified they collect on its behalf is not required to hold a Texas tax permit; a Texas-based seller still needs its own permit and must file returns even when marketplaces handle collection. Sales on your own website are always yours to track against the threshold and collect on once registered.

Registering and filing

If you determine you must collect Texas tax, register before making taxable sales. The Comptroller's sales tax permit application page covers who must hold a permit and points to the Texas Online Tax Registration Application in its eSystems portal; allow two to three weeks. Once registered, you file and remit on the schedule the Comptroller assigns, collecting the 6.25% state rate plus local tax (or the single local use tax rate, if elected).

The multi-state picture

Texas is one state's worth of rules. At least 41 states plus DC tax some form of digital goods, each with its own definitions and thresholds — our state-by-state guide to sales tax on digital products maps the landscape, and the Digital Seller's Sales Tax Checklist condenses the compliance steps into a printable two-pager. SurcoPay's built-in tax tooling applies quirks like the Texas 80/20 split at checkout and tracks your sales against each state's nexus threshold as it approaches.

FAQ

Does Texas charge sales tax on digital products?

Generally yes, as of August 2026. Texas taxes a digital product when the same item would be taxable sold in physical form, so downloads like ebooks, music, and digital art are generally taxable — and SaaS is taxed as a data processing service with 20% of the charge exempt. Not tax advice; verify with the Texas Comptroller of Public Accounts.

Is SaaS taxable in Texas?

Yes. As of August 2026, the Texas Comptroller treats software as a service as a taxable data processing service: 20% of the charge is exempt, so tax is due on 80%. The amended rule (34 TAC 3.330) took effect April 2, 2025 — confirm how it applies to your product with the Comptroller.

What is Texas's economic nexus threshold?

$500,000 in gross revenue from taxable and nontaxable sales into Texas during the preceding twelve calendar months, with no transaction-count threshold. After crossing it, a remote seller must obtain a permit and begin collecting no later than the first day of the fourth month after the month the threshold is exceeded.

Sources

Official Texas Comptroller of Public Accounts pages relied on for this guide:

• Texas Comptroller — Sales and Use Tax (6.25% state rate, 2% local cap, 8.25% maximum combined)
• Texas Comptroller — Taxable Services (Publication 96-259) (data processing including SaaS, the 20% exemption, information services, streaming under cable television services, amusement services)
• Texas Comptroller — Data Processing Services are Taxable (Publication 94-127)
• Texas Comptroller — Remote Sellers ($500,000 threshold, permit timing, single local use tax rate)
• Texas Comptroller — Marketplace Providers and Marketplace Sellers
• Texas Comptroller — Sales Tax Permit Application (Texas Online Tax Registration Application)
• Texas Comptroller — Online Orders: Texas Purchasers and Sellers (Publication 94-171)

Secondary references used to cross-check:

• TaxJar — Sales tax by state: digital products (Texas's physical-equivalent principle)
• Grant Thornton — Texas updates data processing services tax rule (amended 34 TAC 3.330, effective dates)

Keep reading

• Do You Need to Collect Sales Tax Selling Digital Products? A State-by-State Guide
• The Digital Seller's Sales Tax Checklist (free download)
• Florida Sales Tax on Digital Products (2026)
• Louisiana Sales Tax on Digital Products (2026)
• Platform Fee Calculator