No, Texas only taxes the sale amount. It is rather difficult to say what Walgreens did here. The actual State sales tax is 6.25%. The State then allows local taxing authorities (cities, counties) to tack on an additional amount up to 2%. The maximum amount of combined state and local sales tax is thus 8.25%, except for fireworks which have a much higher tax rate. Where I live, the combined state and local sales tax rate is 8.0%. Walgreens charged me 8.4%. Walgreens is located in multiple states, so it is quite possible that they simply have an incorrect database. Perhaps someone entering the rates into the database accidentally converted 8-1/4% to 8.4%. It is no big deal as it amounted to only a $0.40 overcharge. BTW, we have no state income tax in Texas, so they increase the other taxes to compensate for that. So we wind up with higher sales tax, property tax, etc. to make up the difference. I'm glad I don't smoke because tobacco tax on cigarettes is higher than the cigarettes, or so I've heard!