DALLAS – Texas sales tax revenue remained positive for the second month in a row as the state collected $2.38 billion in April, a 3% increase over the same month last year, state Comptroller Glenn Hegar reported.
“Growth in sales tax revenue was led by remittances from the retail trade and construction sectors,” Hegar said. “As expected, receipts from oil and gas-related sectors continued to fall due to the ongoing decline in drilling activity.”
The two positive months followed five months of year-over-year declines.
Total sales tax revenue for the three months ending in April 2016 is down 0.8% compared to the same period a year ago.
Sales tax revenue is the largest source of funding for the state budget, accounting for 56% of all tax collections.
Motor vehicle sales and rental taxes, motor fuel taxes and oil and natural gas production taxes also are large revenue sources for the state.
In April the state collected $250 million in motor vehicle sales and rental taxes, down 31.9% from April 2015.
Motor fuel tax revenue of $302.9 million was up 3.2% from April 2015.
Oil and natural gas production revenue came to $147 million, down 36.1% from April 2015.
Despite a sharp decline in the oil and gas industry, Texas continues to report job growth, though at a slower pace than last year and at a rate below the national level of employment growth.
In a May 2 report the Texas Association of Realtors Texas said home sales rose significantly in the first quarter of 2016, while housing inventory fell to an all-time low.
“Despite the economic downturn in some parts of the state, home sales continue to be strong, indicating the enduring demand of Texas real estate,” said Leslie Rouda Smith, chairman of the Texas Association of Realtors. “Our state continues to be a hub for relocation activity, business development and job growth.”
According to the report, 65,265 homes were sold in Texas in the first quarter of 2016, a 7.8% increase from the same quarter of 2015. Home prices continued to rise as well, with the median price for Texas homes increasing 5.4% year-over-year to $195,000.
Jim Gaines, economist with the Real Estate Center at Texas A&M University, said that the economy is definitely cooling off after five years of rapid growth.
“It will be interesting to see how Texas real estate activity performs in the next two quarters, typically the strongest quarters for home sales every yea,” Gaines said.
