(AUSTIN) — Texas Comptroller Glenn Hegar today said state sales tax revenue totaled $3.69 billion in May, 8.6 percent more than in May 2021. Annual revenue growth of 8.6 percent suggests a modest increase in underlying taxable economic activity given the current inflationary environment, with Consumer Price Index inflation at 8.3 percent in April.
The majority of May sales tax revenue is based on sales made in April and remitted to the agency in May.
“Strong, double-digit growth was seen 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,” Hegar said. “Receipts from the construction and wholesale trade sectors also show strong growth.
“Receipts from the services sector posted another substantial gain compared to last year’s same month. Spending at sporting events and concerts was robust the previous month as consumers continued to spend more on live entertainment after being restricted during the pandemic. Receipts from restaurants also increased compared to May 2021.
“Increases in these consumer-driven sectors, coupled with a decrease in receipts from the furniture and general merchandise sectors compared to a year ago, may further indicate that sectors that benefited from pandemic spending patterns will face continued headwinds due to a shift in consumer spending patterns from goods to services.”
Total sales tax revenue for the three months ending in May 2022 was up 15.7 percent compared to a year ago. Sales tax is the largest source of state funding for the state budget, accounting for 59 percent of all tax collections.
Texas collected the following revenue from other central taxes:
- motor vehicle sales and rental taxes — $603 million, up 9 percent from May 2021;
- motor fuel taxes — $319 million, up 1 percent from May 2021;
- oil production tax — $595 million, up 64 percent from May 2021;
- natural gas production tax — $413 million, the highest monthly collections on record, up 216 percent from May 2021;
- hotel occupancy tax — $69 million, up 44 percent from May 2021; and
- alcoholic beverage taxes — $154 million, the highest monthly collection on record, up 22 percent from May 2021.
Fiscal 2022 franchise tax collections totaled $5.16 billion year-to-date through May. Last year, the state deferred the deadline to June from the expected May 15 due date. As a result, compared to collections through June 2021, year-to-date franchise tax collections were up 21.6 percent.
Visit the Comptroller’s Monthly State Revenue Watch for details on all monthly collections. For an extensive history of tax policy developments and fees since 1972, visit our updated Sources of Revenue publication.