The economy of the State of Texas is the second largest by GDP in the United States after that of California. It has a gross state product of $2.932 trillion as of 2025. In 2024, Texas had the most Fortune 500 (F500) companies of any state with 53 in total; elevated to 57 F500 companies, the lead was again designated as Texas in 2026.
In 2023, Texas grossed more than $440 billion a year in exports, more than double the next highest state California ($178 billion). The state continued the lead, exporting over $450 billion in goods in 2025, while importing almost $412 billion during the same year, an increase of 3.7% over 2024 imports.
The state ranked as the eighth-largest economy, were it among sovereign nations of the world, by nominal GDP, ahead of Canada, South Korea, Russia, and Australia, in 2022.
In 2024, Texas had a median household income of $79,721. As of 2024, the state had $73,032,946,298 in total outstanding state debt, including both general obligation of $16,611,730,000 and revenue debt of $56,421,216,298. With $8,348,956,000 of total debt issued including $1,235,430,000 general obligation and $7,113,526,000 revenue supported. Texas has the second largest population in the country, following California, as of 2025.
History
Historically four major business enterprises shaped the Texas economy prior to World War II: cattle and bison, cotton, timber, and oil. The first enterprise to enjoy major success in Texas was cattle and bison. In the early days of Anglo-American settlement, furs and hides were the major products derived from cattle. Beef was not particularly popular in the United States. However, Texas entrepreneurs soon pioneered the beef industry, and demand steadily increased. The cattle industry enjoyed its greatest financial success in the later 1870s and 1880s.
Cotton production, which had been known in Texas since Spanish times, gradually increased throughout the 19th century. By the early 20th century, Texas had become the leading cotton producer in the nation. By the 1920s, the cotton industry was past its peak, as government regulation and foreign competition took their toll.
Forests
The forests of Texas have been an important resource since its earliest days and have played an important role in the state's history. The vast woodlands of the region, home to many varieties of wildlife when Europeans first arrived, provided major economic opportunities for early settlers. They today continue to play an important role economically and environmentally in the state.
The densest forest lands lie in the eastern part of the state. In particular the Big Thicket region, just north of Houston and Beaumont, has historically been home to the most dense woodlands. The Big Thicket was mostly uninhabited until heavy settlement from the U.S. began in the mid-19th century, and was even used as a refuge by runaway slaves and other fugitives. The Rio Grande valley in South Texas was home to a large palm tree forest when Spaniards first arrived, though today very little of it remains.
The development of railroads in the eastern part of the state during the mid-19th century led to a boom in lumber production in the 1880s. This era of financial success lasted approximately 50 years finally coming to an end as Texas's forests were decimated and the Great Depression dropped prices.
Oil boom
In 1901 the Gladys City Oil, Gas, and Manufacturing Company struck oil on Spindletop Hill in Beaumont. Though petroleum production was not new, this strike was by far the largest the world had ever seen. The find led to widespread exploration throughout Texas and neighboring states. By 1940 Texas was firmly established as the leading oil producer in the U.S.
Texas remained largely rural until World War II though the success of the petroleum industry rapidly expanded the economy with heavy industry of many types taking root. The second world war created tremendous demand for petroleum and a variety of products that Texas was in a unique position to provide. By the end of the war Texas was one of the leading industrial states and the population had become predominantly urban. Additionally the economy had diversified sufficiently that, though petroleum was still the largest sector by the end of the war, the business community in the state was truly diverse.
The economy of Texas relies largely on information technology, oil and natural gas, aerospace, defense, biomedical research, fuel processing, electric power, agriculture, and manufacturing.
Fortune 500 companies based in Texasaccording to revenueswith State and U.S. rankings |- |bgcolor="cccccc"| State||||bgcolor="cccccc"|Corporation||||bgcolor="cccccc"|US |- | 1||||McKesson|| ||8 |- | 2||||ExxonMobil|| ||9 |- | 3||||Chevron Corporation|| ||21 |- | 4||||Phillips 66|| ||29 |- | 5||||AT&T||||35 |- | 6||||Valero Energy|| ||40 |- | 7||||Dell Technologies|| ||41 |- | 8||||Tesla|| ||43 |- | 9||||Energy Transfer|| ||53 |- | 10||||Sysco|| ||55 |- | 11||||Caterpillar Inc.|| ||65 |- | 12||||ConocoPhillips|| ||75 |- | 13||||Oracle|| ||82 |- | 14||||American Airlines Group|| ||86 |- | 15||||Enterprise Products|| ||89 |- | 16||||USAA|| |||93 |- | 17||||Plains GP Holdings|| ||103 |- | 18||||CBRE Group|| ||118 |- | 19||||Hewlett Packard Enterprise|| ||133 |- | 20||||D.R. Horton|| ||134 |- | 21||||NRG Energy|| ||149 |- | 22||||Quanta Services|| ||157 |- | 23||||Southwest Airlines|| ||163 |- | 24||||Baker Hughes|| ||164 |- | 25||||Charles Schwab|| ||165 |- | 26||||HF Sinclair|| ||171 |- | 27||||Occidental Petroleum|| ||173 |- | 23||||Waste Management|| ||202 |- | 24||||EOG Resources|| ||201 |- | 25||||Group 1 Automotive|| ||204 |- | 25||||Halliburton|| ||207 |- | 26||||Tenet Healthcare|| ||214 |- | 27||||Cheniere Energy|| ||223 |- | 28||||Kimberly-Clark|| ||225 |- | 29||||Corebridge Financial|| ||236 |- | 30||||Vistra|| ||274 |- | 31||||Texas Instruments|| ||252 |- | 32||||Targa Resources|| ||262 |- | 33||||Kinder Morgan|| ||266 |- | 34||||Keurig Dr Pepper|| ||268 |- | 35||||AECOM|| ||276 |- | 36||||Fluor|| ||292 |- | 37||||Builders FirstSource|| ||296 |- | 38||||Diamondback Energy|| ||301 |- | 39||||Jacobs Solutions|| ||369 |- | 40||||Yum China Holdings|| ||375 |- | 41||||Westlake Chemical|| ||388 |- | 42||||Celanese|| ||431 |- | 43||||CenterPoint Energy|| ||435 |- | 44||||APA Corporation|| ||438 |- | 45||||Comfort Systems USA|| ||440 |- | 46||||NOV|| ||455 |- | 47||||KBR|| ||470 |- | 48||||Commercial Metals|| ||491 |- | 49||||Coterra Energy|| ||496 |- | 50||||Primoris Services|| ||497 |- | colspan="5" |Further information:List of Texas companiesSource: "The Full Fortune 500 List" 2026"Fortune 500" Fortune.com. Accessed July 10, 2026.
Exports
Texas had led the United States in export revenues since 2001, grossing more than $440 billion in 2023.
Largest export categories (2023):
Oil and gas – $140 billion Petroleum and coal products - $70 billion Chemicals - $58 billion Computer and electronic parts - $53 billion Transportation equipment - $27 billion
Mexico is by far the largest export partner with Texas, receiving nearly $130 billion worth of goods in 2023. The next largest export partners are Canada ($36 billion) and Netherlands ($26 billion).
Air Cargo World rated Dallas/Fort Worth International Airport as "the best air cargo airport in the world". The Port of Houston is the largest port in the U.S. by tonnage, with more than 266 million tons of cargo passing through the port in 2021.
Taxes According to the Tax Foundation, Texans' state and local tax burdens are among the lowest in the nation, 7th lowest nationally, with state and local taxes costing $3,580 per capita, or 8.7% of resident incomes. Texas is one of only 7 states not to have a state income tax. The state sales tax rate, 6.25%, is above the national medium, with localities adding up to 2% (8.25% total). Texas does have a "back to school" sales tax holiday once a year (generally around the first weekend in August) on clothing and footwear under $100.
As for Texas's business tax climate, the state ranks 8th in the nation. Property taxes are exclusively collected at the local level in the state, and are generally at rates above the national average.
Tax burden Texas is one of the seven states of the United States with no personal state income tax. In addition, Texas does not allow any lower level of government (counties, cities, etc.) to impose an income tax. This means that, for the residents of Texas, the maximum rate of income taxation is the top rate set by the federal government. Businesses, except for sole proprietorships and partnerships, are subject to a franchise tax.
The state sales tax is set at 6.25 percent. Cities are allowed to impose an additional 2% tax, most Texas sales tax rates are 8.25 with an average sales tax of 7.968%. The state determines the items subject to sales tax, which all other entities must follow. Motor vehicle sales are subject only to the 6.25% state sales tax. Along with clothing, restaurants, and certain medicines. Groceries, except for prepared food, prescription drugs and OTC drugs are among the major items exempt from sales tax.
While property taxes are among the highest in the nation with the median property tax being $2,275 per year with a home with a median value of $125,800. Property costs are also among the lowest in the nation. Property taxes constitute the majority of revenue and are collected and kept by local governments, as the Texas Constitution specifically prohibits a state property tax. For real property, counties, cities, and school districts (along with other special districts, such as for a community college or public hospital) can also impose taxes. All property is assessed uniformly throughout the county via the county "appraisal district", and taxes are assessed based on 100% of the property's assessed value. While larger personal property items such as cars, boats, and airplanes can be subject to local taxes as well, it is far less common.
Industries
Agriculture
Texas has the most farms in the United States, both in terms of number and acreage. Texas leads the nation in number of cattle, typically exceeding 16 million head, and also leads in cotton, hay, sheep, wool, goat and mohair production. Agriculture is essential to its economy; $150 billion dollars was gained from agriculture in 2024.
Cultivation of mung bean here began during World War II when a Chinese native by the name of Henry Huie – who worked as a U.S. Army cook – planted the staple crop in the clay plains near Vernon.The Wok Ethnic, Texas Monthly September 1975
Texas leads nationally in production of sheep and goat products. Texas is king of cotton, leading the nation in cotton production, its leading crop and second-most-valuable farm product. It is a leader in cereal crop production. Three counties in the state—Colorado, Wharton and Matagorda—take advantage of water from the Lower Colorado River Authority to grow rice and are responsible for about 5% of annual U.S. rice production. Texas is also a large producer of cantaloupes.
The Rio Grande Valley is one of the best areas for the cultivation of grapefruit. Early varieties like the Duncan had many seeds and pale flesh, but in the 1880s citrus growers in Texas and Florida discovered pink-fleshed seedless grapefruit mutations like the Ruby Red, which, along with red-fleshed varieties like the Rio Red and Star Ruby, are preferred varieties for modern commercial production.The Oxford Companion to American Food and Drink
Grapes are a common crop in some parts of Texas. In the 1990s, strawberry acres had greatly increased, especially around Poteet; however, by 2004, imported strawberries had competed almost all strawberry production out of the state.