DALLAS – Texas sales tax revenue continued to fall compared to the same month a year earlier, dropping 6.8% to $2.35 billion in February, state Comptroller Glenn Hegar said.
On a percentage basis, the drop was the largest in a year. The February 2015 report showed revenues rising 11.7% to $2.46 billion.
With no income tax, Texas is heavily dependent on sales taxes, which make up 56% of all tax collections, Hegar said. As the year progresses, Hegar said he expected the monthly declines to diminish.
"Last month's decrease in sales tax collections as compared to February 2015 was expected with the continued contraction in both the manufacturing and oil industries," Hegar said. "It should be pointed out that in the coming months we expect comparisons to last year's collections to be more favorable, because collections in the last half of fiscal 2015 didn't grow as fast the first half."
Reflecting the sharp fall in oil prices and cutbacks in oilfield activity, oil and natural gas production taxes plunged 62.2% to $111.1 million, Hegar said.
On the positive side of lower gasoline prices, motor fuel taxes rose 1% to $286.5 million. Motor vehicle sales and rental taxes grew 5.2% to $327.2 million, he said.
The comptroller's report represents sales recorded in January and tabulated in February.
For the month of February, a drop in the Dallas Federal Reserve Bank's state sales index indicates that retail sales declined, even after seasonal adjustment.
The index, which measures activity at Texas retailers, dipped to negative 5.1 from 11 in January, hitting its lowest point in nine months, according to the Texas Retail Outlook Survey, a section of the sector-wide report.
The state revenue index, a key measure of activity at private service-providing companies, remained essentially flat at a reading of 9.7 in February, according to the monthly Texas Service Sector Outlook Survey. The index registered 10 in January.
The similar, positive figure indicated that revenue across the Texas service sector continue to expand at the same rate.
