HEGAR: Texas' Oil Patch is Rebounding – Natural Gas Production Revenues Hit Highest Monthly Level on Record

Sales tax is the largest source of state funding for the state budget, accounting for 59 percent of all tax collections.

Texas Insider Report: AUSTIN, Texas – Texas Comptroller Glenn Hegar today said State Sales Tax Revenue totaled $3.69 billion in May, 8.6% more than in May 2021. Annual revenue growth of 8.6% suggests modest growth in underlying taxable economic activity, in view of the current inflationary environment with Consumer Price Index inflation at 8.3% 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 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,” Hegar said. “Receipts from the construction and wholesale trade sectors also continue to show strong growth.

“Receipts from the services sector posted another substantial gain compared to the same month last year. 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. 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% compared to the same period a year ago.

Sales tax is the largest source of state funding for the state budget, accounting for 59% of all tax collections.

Texas collected the following revenue from other major taxes:
  • Motor vehicle sales and rental taxes — $603 million, up 9% from May 2021;
  • Motor fuel taxes — $319 million, up 1% from May 2021;
  • Oil production tax — $595 million, up 64% from May 2021;
  • Natural gas production tax — $413 million, the highest monthly collections on record, up 216% from May 2021;
  • Hotel occupancy tax — $69 million, up 44% from May 2021; and
  • Alcoholic beverage taxes — $154 million, the highest monthly collections on record, up 22% from May 2021.
Fiscal 2022 franchise tax collections totaled $5.16 billion year-to-date through May. Last year, the reporting deadline was deferred to June from the usual May 15 due date.

Compared to collections through June 2021, year-to-date franchise tax collections were up 21.6%.

Texas Comptroller Glenn Hegar by N/A is licensed under N/A