Texas maintaining its momentum on sales tax growth

By Michael Carroll

Texas continued on a path toward increased growth in state sales tax revenues in June as sales of products and services brought in $2.86 billion to state coffers, the Comptroller’s Office reported this week.

That volume represented an increase of 3.3 percent over the same period last year, Comptroller Glenn Hegar said in a news release.

Those numbers follow a record in monthly sales tax collections set in May. Revenues surged just over $3 billion in May, which was a 7.7 percent increase over May of 2018.

Kevin Lyons, a spokesman for the Comptroller’s Office, said the fluctuation in year-over-year sales tax growth rates was normal.

“They’re different shopping seasons,” Lyons told The Center Square. “... Sometimes you’re up 7 percent, sometimes you’re up 3 percent.”

In the three months ending in June, Texas sales tax growth over the same period last year was 5.1 percent, according to the Comptroller’s Office. And Hegar said in a report at the beginning of the year that the revenue estimate for 2020-21 would be 8.1 percent over what it was in 2018-19.

“Moderate growth in state sales tax revenue was led by receipts from the oil- and gas-mining, construction and services sectors,” the comptroller said in a prepared statement. “Tax receipts from restaurants also were up significantly, while growth in collections from retail trade was negligible.”

The retail trade revenue figure is not an indication of an economic slowdown, Lyons said.

“I don’t think there’s a concern,” he said. “It’s one sector of the total sales tax.”

The sales tax represents Texas’ biggest source of revenue for the state budget, since Texas does not have a personal income tax.

In other numbers from the latest Comptroller’s Office report, auto sales and rental taxes were down 1.5 percent last month, and motor fuel taxes – which provide funds to maintain roads and highways – were up only slightly, by 0.8 percent.

Oil production taxes jumped 7.5 percent in June compared with June 2018, and the franchise tax on businesses in the state produced revenues in June that were 18.5 percent above what was collected during the same period last year.