Texas sales tax collections in March fell 2.4% compared to the same month last year, Texas Comptroller Glenn Hegar reported.
Because the collections in March mostly represent sales in February, the latest report is the last to compare pre-pandemic and post-pandemic months.
This year the Feb. 22 due date for state taxes and fees to be reported and paid was extended by one week, to March 1, due to the effects of a severe winter storm that led to
“Adjusted for the effects of delayed payments due to the late February winter weather disaster, March state sales tax collections continued to slump below levels of a year ago,” Hegar said. “Collections from all major sectors other than retail trade and restaurants continued to decline, led by depressed receipts from oil- and gas-related businesses.”
Total sales tax revenue for the three months ending in March 2021 was down 5.3% compared to the same period a year ago.
Sales tax is the largest source of state funding for the state budget, accounting for 59% of all tax collections.
While the effects of the COVID-19 pandemic continued to depress some sources of revenue, others are now exhibiting year-over-year gains when compared to a year ago when the effects of the pandemic had started to take hold, Hegar said.
“Some of the trends established during the COVID-19 pandemic continued, as remittances from online retailers, building materials stores and sporting goods stores continued to show strong growth over the previous year,” he said. “Clothing and accessories stores and furniture stores showed declines, likely due to store closures caused by widespread power outages.
“Tax receipts from restaurants were up over the previous year’s levels for the first time since onset of the pandemic, but the increase reflects the first month affected by the pandemic, as restaurant activity began to slow in the latter half of February 2020.”
The Valentine’s week freeze claimed 111 lives after the failure of the state’s largest power grid to supply enough electricity to heat homes. One major electric co-op filed for bankruptcy and other major utilities faced financial crises and credit downgrades.
Last month, Hegar reported that state sales tax revenue of $2.51 billion in February fell 13.3% below that of February 2020.
After adjusting the February totals to account for March 1 activity, February sales tax revenue totaled $2.68 billion, down 7.5%.
“The pattern in sales tax collections we’ve seen for the past several months continued, with receipts from the retail trade sector showing gains over the prior year while receipts from oil- and gas-related sectors show deep declines,” Hegar said.
“Receipts from the service sector, as well as from restaurants and bars, also remain down significantly as many of these businesses had occupancy restrictions or were required to be shuttered during the COVID-19 pandemic.”
