Texas sales tax revenue totaled a record $3.4 billion in April

By Bethany Blankley

Record high retail sales in Texas in March led to record high sales tax collections in April, the state Comptroller’s Office said.

Texas’ April 2021 sales tax revenue of $3.4 billion represented an increase of 19.2% from April 2020.

Sales tax is the largest source of funding for the state budget, accounting for 59% of all state tax collections.

“Spurred by a number of factors, April state sales tax collections increased sharply from a year ago,” Comptroller Glenn Hegar said. “Collections from all major sectors other than mining and construction rose significantly, led by receipts from restaurants and retailers.

Part of the growth can be attributed to April 2020 being the first full month of government-imposed restrictions on businesses and individuals to slow the spread of COVID-19, Hegar said.

“Spending this March affecting April tax collections was supported by widespread business reopenings and the lifting of capacity restrictions, greater consumer confidence in going out as the vaccine rollout progressed, federal stimulus checks and spending delayed from February into March due to the winter storm and power outage,” he added.

Sales increases included those in the retail sector across the board, with especially notable increases reported from clothing stores, online retailers, general merchandisers, sporting goods stores and building materials and home furnishings stores.

Tax receipts from restaurants were also up significantly from last year after Texans increasingly ordered take-out and delivery, “but the dine-in segment continues to languish, with many establishments now permanently closed,” Hegar noted.

In addition to sales taxes, Texas reported sharp year-over-year increases in other tax categories as well.

Texans paid $378 million in motor vehicle sales and rental taxes, an increase of 130% from April 2020, and a 27% increase from April 2019.

Texans also paid $325 million in motor fuel taxes, an increase of 15% from April 2020 and a 1% increase from April 2019.

They also paid $119 million on taxes on alcohol, a 110% increase from April 2020, but 7% less than April 2019.

With more people moving to Texas or traveling to in-state destinations, those staying at hotels paid $51 million in hotel occupancy taxes, a 116% increase from April 2020 and a 20% decrease from April 2019.

Oil and natural gas production taxes, paid for by companies, were also up. Oil production taxes totaled $334 million, a 75% increase from April 2020 and a 3% decrease from April 2019.

Natural gas production taxes of $232 million reported the greatest increases, 247% from April 2020 and 81% from April 2019.