(AUSTIN) — State sales tax revenue in October totaled $3.81 billion, down 0.3% from October 2022, according to a news release from the office of Texas Comptroller Glenn Hegar.
“For the first time in 31 months following the end of pandemic restrictions, monthly state sales tax collections failed to grow on an annual basis,” Hegar said. “October sales tax collections are in line with our recent Certification Revenue Estimate, which predicted slower economic growth in the months ahead. Contributing to the year-over-year decline was erratic refund activity this month, as well as notable declines in receipts from some sectors, which could indicate a slowing economy.
According to the release, the majority of October sales tax revenue is based on sales made in September and remitted to the agency in October.
“Receipts from the larger business spending-driven sectors — manufacturing and wholesale trade — declined significantly from a year ago, and receipts from the construction sector barely surpassed the previous year. This could be due to declines in business input prices, but it could also indicate slowing production. Receipts from the oil and gas mining sector continued to exceed those of the previous year.
Officials detailed that the sales tax for the three months ending in October 2023 was up 2.7% compared to the same time a year ago. Sales tax is the largest source of state funding for the state budget accounting for 57% of all tax collections.
“Among consumer-dependent retail trade sectors, receipts from home improvement centers and furniture stores dropped sharply from a year ago. Receipts from electronics and appliance stores, big-box general merchandisers, department stores, and clothing stores were also down significantly. Receipts from online merchants and gasoline stations were up slightly but at less than the rate of general price inflation. Declines in retail sales from a year ago may reflect numerous factors, including reallocation of household budgets away from goods to services and to higher debt-service costs, falling prices for some categories of goods such as electronics, and depletion of excess savings that households had accumulated during the pandemic.”
Texas collected the following revenue from other major taxes:
- motor vehicle sales and rental taxes — $606 million, up 3 percent from October 2022;
- motor fuel taxes — $316 million, up 1 percent from October 2022;
- oil production tax — $586 million, up 8 percent from October 2022;
- natural gas production tax — $192 million, down 53 percent from October 2022;
- hotel occupancy tax — $67 million, up 2 percent from October 2022; and,
- alcoholic beverages taxes — $154 million, up 2 percent from October 2022.
For more information regarding all monthly collections, visit the Texas Comptroller’s website.