DALLAS – Texas sales tax revenues in March grew 2.1% compared to the same month last year.
"The modest growth in sales tax collections for March was in line with expectations and comes after five consecutive months of declining sales tax revenues," Comptroller Glenn Hegar said. "Stronger growth in receipts from the retail trade, restaurant and construction sectors was offset by continued weakness in net collections from oil and gas-related sectors."
Total sales tax revenue for the three months ending in March 2016 is down 3.2% compared to the same period a year ago, Hegar said.
Sales tax revenue is the largest source of state funding for the state budget, accounting for 56% of all tax collections.
Motor vehicle sales and rental taxes rose 3% over the same month in 2015 to $394.9 million.
With lower pump prices, rising fuel taxes indicated that Texans were driving more in March. Those taxes were up 8.2% to $281.6 million, Hegar said.
By contrast, oil and natural gas production tax revenues were down 54.9% to $107.2 million, as oil company operators continued to mothball rigs.
Business managers reported more optimistic outlooks on business conditions in Texas, according to the Federal Reserve Bank of Dallas.
The state revenue index, a key measure of activity at Texas' private service-providing firms, dropped to a reading of 6.4 in March from 9.7 the prior month, according to the Texas Service Sector Outlook Survey.
A drop in net retail sales across the state played a role in slowing the broader sector's growth, according to the Dallas Fed. The negative reading marked the first time state retailers have posted two consecutive months of contracting sales in five years, according to Dallas Fed data.
