Texas sales tax revenue reaches $3.69 billion in May, up 8.6% from May 2021

By Bethany Blankley

Texas is flush with tax revenue, new data released by the state comptroller’s office shows, despite rising inflation and increased costs that are burdening consumers.

Total sales tax revenue for the three months ending in May 2022 was up 15.7% compared to the same period last year. Sales tax is the largest source of funding for the state budget, accounting for 59% of all tax collections.

In May, sales tax revenue was $3.69 billion, up 8.6% from May 2021. In April, it was $3.8 billion, up 12.8% from April 2021.

The majority of sales tax revenue for a given month is based on sales made in the previous month remitted to the agency the following month. May tax revenue is based on April sales remitted in May; April revenue is based on March sales remitted in April.

“Strong, double-digit growth was seen once again in sectors driven primarily by business spending, with receipts from the oil and gas mining sector continuing to exhibit particularly robust growth compared to a year ago,” Comptroller Glenn Hegar said in a statement.

The oil and natural gas industry paid a record amount of production taxes, up 64% for oil producers and 216% for natural gas producers. Oil producers paid $595 million in taxes in April, according to May data: natural gas producers paid $413 million, the highest monthly collections on record.

Combined, the industry paid $1.008 billion in production taxes, according to May remittances.

“The state’s natural gas production tax revenue was an all-time high in May,” the Railroad Commission of Texas, which regulates the industry, said in a statement. “That revenue helps fund education, transportation and other parts of the state budget.”

Texas oil producers paid $666 million to the state in oil production taxes in April – the highest amount in history, representing a 99% increase from April 2021.

The monthly amounts of tax revenue paid by the industry in the past two months alone exceeds the total amount of revenue the industry has paid for an entire year in some previous years, according to remittance data.

Natural gas producers paid $339 million in taxes, up 46% from April 2021.

Combined, the oil and natural gas industry paid $1.005 billion in production taxes in April.

“Spending at sporting events and concerts was especially strong last month as consumers continue to spend more on live entertainment after being restricted during the pandemic,” the comptroller noted. Construction, wholesale trade, and services sectors were showing strong growth, he also pointed out; receipts from restaurants also increased.

In addition to sales tax, other major taxes are levied on motor vehicle sales and rentals, motor fuel, oil and natural gas production, hotels and alcohol sales, as well as taxes on franchises.

In May, remittances for motor vehicle sales and rental taxes were up 9% at $603 million; motor fuel taxes were up 1% at $319 million; hotel occupancy taxes were up 44% at $69 million and alcoholic beverage taxes were up 22% – the highest monthly collection on record.

Fiscal 2022 franchise tax collections totaled $5.16 billion year-to-date through May, up 21% from last year.

The double-digit growth of state sales tax revenue from March collected in April was a new high, Hegar noted, which “reflecting both inflation and continued expansion in real economic activity and employment.”

Total sales tax revenue for the three months ending in April 2022 was up 22.3% compared to the same period last year.

Post a Comment

Previous Post Next Post