State Sales Tax Revenue Totaled $4 Billion In January

Texas Comptroller Glenn Hegar said state sales tax revenue totaled $4.02 billion in January, 2 percent less than in January 2023. Most of January’s sales tax revenue is based on sales made in December and remitted to the agency in January.

“For the second time since health officials lifted the pandemic restrictions, monthly state sales tax collections fell compared with the same month the year before,” Hegar said. “A contributing factor was higher-than-normal refund activity, but several sectors trending downwards in recent months continued to show weakness in January.

“Remittances from the wholesale trade sector were down for the ninth time in 10 months, and receipts from manufacturing were down for the fourth time in five months. Receipts from the oil and gas mining sector were down for the second month. In the significant sectors driven primarily by business spending, remittances from the construction sector were the lone positive standout, increasing by mid-single digits compared with a year ago.

“Overall, receipts from the consumer-driven retail trade sector were just slightly above last year, but with receipts from most retail subsectors down. Receipts from electronics and appliance stores were down the most, followed by declines from clothing and apparel stores. Remittances from home improvement centers and furniture and home goods stores continued to decline significantly, as has been the case in recent months following the pandemic-spurred boom in those categories. Receipts from general merchandisers also fell. Receipts from online merchants were the bright spot among the sizeable retail trade subsectors, with remittances coming in strongly over January 2023 totals.

“Receipts from restaurants grew in the mid-single digits and slightly higher than the inflation rate for food away from home.”

Total sales tax revenue for the three months ending in January 2024 was up 1.6 percent compared with the same period a year ago. Sales tax is the largest source of state funding for the state budget, accounting for 57 percent of all tax collections.

Texas collected the following revenue from other central taxes:

• Motor vehicle sales and rental taxes — $618 million, up 9 percent from January 2023;
• Motor fuel taxes — $307 million, down 1 percent from January 2023;
• Oil production tax — $500 million, up 3 percent from January 2023;
• Natural gas production tax — $188 million, down 41 percent from January 2023;
• Hotel occupancy tax — $25 million, down 54 percent from January 2023; and
• Alcoholic beverage taxes — $154 million, down 1 percent from January 2023.

For details on all monthly collections, visit the Comptroller’s Monthly State Revenue Watch. For an extensive history of tax policy developments and fees since 1972, visit our updated Sources of Revenue publication.