In addition to federal income taxes, you will also be exposed to the local sales tax and if you own property, the local real estate tax as well as vehicle and hotel taxes.
Texas charges a sales and use tax on retail, rentals, leases based in Texas and certain services and goods. The state tax is 6.25% and local taxes are added to this rate. The current sales tax inside the Houston city limits is 8.25% (6.25% state sales tax, 1% Houston City and 1% Houston MTA Transit tax). Outside the city limits in Harris County, the tax is 7.25% (6.25% state sales tax and 1% Houston MTA Transit tax). Sales tax is not included in the price tag but added to the cost of the goods or services which you must be aware of when calculating your purchase.
If you purchase property in Houston, you will be required to pay an annual tax based upon the value of your property. The average real estate tax is roughly 1.5-3% of the total property’s value; however, it varies based upon the area that your property is located within such as city of Houston, Harris County, one of the independent cities and villages inside Houston, such as West U or Bellaire for example. Property tax is calculated by adding the city tax, county tax, school tax and any water tax. You do not have to pay property taxes as a renter. Taxes can be paid online at the Harris County Appraisal District’s website.
Vehicles, such as cars, trucks or motorcycles and boat registrations are due annually from last date of paid registration and calculated by the value. Registration renewals can be paid online, in person at a local tax office or at the customer service desk of many major supermarkets. For example, an average registration renewal for a automobile ranges from $60 to $90 a year.
As an expat living in a hotel, you may also notice an hotel occupancy tax on your bill. The state hotel tax is 6% and added to local taxes, which are 7% for inside the city of Houston, 2% for Harris county and 2% Sports Authority tax which adds up to 17% tax added to your bill.