Out-the-door price in Texas
How Texas works
- Texas motor vehicle sales tax is a flat 6.25% statewide — no city or county add-ons on vehicles, so your rate is the same in every ZIP.
- Your trade-in reduces the taxable amount (you're taxed on the “trade difference” — the vehicle's value, not your equity).
- Manufacturer rebates passed to you are treated as a cash discount and REDUCE the taxable amount (Comptroller Guide 96-254) — the opposite of California.
- Separately stated service contracts (VSC/extended warranty) and GAP are excluded from the taxable base in Texas — make sure they're itemized separately on your buyer's order.
- Texas doesn't charge sales tax on the doc fee or a dealer's inventory tax charge when they're listed separately on your buyer's order.
Rules last verified Oct 3, 2026. Our methodology.
Try it for your ZIP
What a Texas advertised price has to include
Texas's own advertising rules already require a dealer's featured price to include freight, dealer prep and any markup, and the dealer has to sell at that price to any buyer. The FTC expects more: every fee the dealer charges, the doc fee included, belongs in the advertised price, so only government charges like tax, title and registration can be added on top. That still isn't your out-the-door number; the calculator above adds the rest for your ZIP.
Federal law comes first
The FTC requires a dealer's advertised price to include every fee the dealer charges. Only charges the government requires you to pay, like tax, title and registration, can be left out. Where a state's rules let a dealer leave a fee out, the dealer still has to follow the federal rule, so the fee goes in. The FTC says a state's doc-fee rules can add disclosures, but they don't change the price that has to be advertised. Read the FTC's guidance.
Texas law and the FTC conflict on the doc fee
Texas's advertising rule lets a dealer leave fees allowed by law, such as the doc fee, out of its featured price. The FTC expects every fee a dealer charges to be in the advertised price. A dealer can satisfy both by including it; Texas's required doc fee notice goes on the buyer's order and contract, not in the ad. Until regulators or the courts settle it, you may see Texas ads that leave it out. Ask whether a price includes it, and get the out-the-door price in writing.
What the FTC expects in the advertised price
- Destination (freight) and dealer prep charges
- Any dealer markup, such as a "market adjustment"
- Anything the dealer has added to the car, such as accessories and add-on packages
- The doc fee (Texas presumes $225 or less is reasonable)
- The dealer's inventory tax charge, if the dealer passes it on
- On a used car that needed an emissions test, the test charge
- Any other fee the dealer charges, such as a "dealer service" or "prep" fee
Can still be added on top
- Sales tax (6.25%)
- Title, registration, license plate, inspection and county fees
- Optional products you choose to buy, such as a service contract or GAP coverage
- The inventory tax line: Texas taxes dealers on their inventory, and many pass it on as a separate line on the buyer's order, typically about 0.2% of the price. It's the dealer's tax, not yours. The state Comptroller calls it a negotiable item, and under federal law it belongs in the advertised price.
- The doc fee amount: Texas presumes a doc fee of $225 or less is reasonable. A dealer can charge more only after filing a cost analysis with the Office of Consumer Credit Commissioner, and must charge the same fee to cash and credit buyers. With a buyer's order in hand, you can ask that office whether the dealer has filed for a higher fee.
- Price honoring: the dealer has to sell at its featured price to any buyer. An ad can't make that price depend on a trade-in, dealer financing or a down payment, and "internet price" or "e-price" labels are banned.
- Rebates: a rebate only some buyers qualify for can't be built into the featured price.
- Addendum stickers: a dealer sticker beside the window sticker has to show any added markup and the total dealer selling price, and can't be made to look like the factory sticker.
- Dealer fees outside the price: Texas's consumer credit regulator has ordered dealers that charged "dealer service" or "prep" fees on top of the price to put those fees in their advertised prices.
More in our guide: Do dealers have to put fees in the advertised price? What actually changed for 2026
See every state: Which states let dealers leave the doc fee out of the advertised price?
Texas in detail
Texas OTD questions, answered
Does a trade-in reduce sales tax in Texas?
Yes — Texas taxes the difference: your trade-in's value is subtracted before tax is computed.
Are manufacturer rebates taxed in Texas?
No — rebates passed to you are treated like a cash discount and reduce the taxable amount.
Is the doc fee capped in Texas?
Not as a hard limit. Texas presumes a doc fee of $225.00 or less is reasonable (7 TAC §84.205(b); Fin. Code §348.006). A dealer can charge more only after filing a cost analysis with the state's consumer credit regulator, and must charge the same fee to cash and credit buyers.
What does a Texas dealer's advertised price have to include?
Freight, dealer prep, any markup and anything the dealer has added to the car (Texas rules), plus every fee the dealer charges, including the doc fee and any inventory tax charge (the FTC's position; Texas lets dealers leave fees allowed by law out of the featured price, so the two conflict). Only sales tax, title, registration and other government fees can be added on top.
What is the vehicle inventory tax on a Texas buyer's order?
It's a property tax Texas charges dealers on their inventory, which many pass on as a separate line, typically about 0.2% of the price. It's the dealer's tax, not yours: the state Comptroller calls it a negotiable item, and under federal law it belongs in the advertised price. It isn't subject to sales tax.