Texas sales tax collections set a scorching pace in July, soaring 13.5% above the same month last year to $3.39 billion, Texas Comptroller Glenn Hegar said.
Sales tax is the largest source of state funding for the state budget, accounting for 59% of all tax collections.
“July state sales tax collections again strongly surpassed both year-ago and pre-pandemic levels, with continued vigorous growth from non-retail sectors,” Hegar said. “The sharpest increase from a year ago was in receipts from oil and gas mining, as the higher crude oil prices of recent months support increased drilling activity, albeit still well below the pre-pandemic pace.
The majority of July sales tax revenue is based on sales made in June and remitted to the agency in July.
“Receipts from retail trade sectors continue to be the most highly elevated, as resurgent consumer spending following the lifting of pandemic-related restrictions and supported by increasing employment, federal income support policies and low interest rates does not appear to have begun to slow,” Hegar said.
“Within retail trade, the greatest growth in receipts from a year ago was from clothing and clothing accessories stores and electronics and appliance stores – retailers especially hard hit by the pandemic,” he added.
“While receipts from sectors that had increased sales following the onset of the pandemic – food and beverage stores, furniture and home furnishings stores, and sporting goods and hobby stores – had no growth compared to a year ago, receipts remain strongly above pre-pandemic levels,” Hegar said. “And receipts from other retail sectors that grew strongly last year – big box and online general merchandisers and building materials stores – continued to have robust growth.”
Year-ago revenue collections to which this year’s collections are compared were suppressed by the pandemic, Hegar said.
Year-over-year growth in July sales tax collections, however, is not attributable to such base effects, as sales tax revenue was surprisingly strong in July 2020, he noted. Compared to July 2019, sales tax collections were up a dramatic 18.4%.
Total sales tax revenue for the three months ending in July 2021 was up 20.2% compared to the same period a year ago and 13.9% compared to 2019.
