Texas sales tax revenue continues its record pace
Texas’ record sales tax growth continued into the New Year with January revenues rising 8.9% to $3.08 billion, state Comptroller Glenn Hegar reported.
It was the third month in a row in which sales tax revenues for the state exceeded $3 billion. Texas first hit that threshold in May 2019. Last year's collections represented a record for the calendar year.
The majority of January sales tax revenue is based on sales made in December and remitted to the agency in January.
“Growth in state sales tax revenue was led by receipts from the retail trade and information services sectors, while receipts from oil and gas mining were down from a year ago,” Hegar said.
“January retail trade sector collections were higher than a year ago in part because more Christmas shopping days fell in December,” he added. “Collections also were slightly boosted by marketplace providers and remote sellers, who first began collecting Texas sales taxes in October.”
Total sales tax revenue for the three months ending in January 2020 was up 6.6% compared to the same period a year ago. Sales tax is the largest source of state funding for the state budget, accounting for 57% of all tax collections. Texas does not impose an income tax.
Sales and rental taxes on motor vehicles rose 10.6% in January to $471 million. Motor fuel taxes rose 1.3% to $308.9 million.
Revenues from gas production fell 14.4% while oil production taxes rose 44%.
The recent drop in oil prices has had less impact on Texas than in neighboring Oklahoma, which has a less diverse economy. While producers in some oil shale regions are cutting back operations, activity remains more robust in Texas’ Permian Basin and Eagle Ford regions.