HEGAR: Measured by State Sales Tax Growth, Texas Economy for Three Months Ending October 2023 is Up 2.7%



“October sales tax collections are in line with our recent Certification Revenue Estimate, which predicted slower growth in the months ahead."

Texas Insider Report: AUSTIN, Texas – “For the first time in 31 months following the end of the pandemic restrictions, monthly state sales tax collections failed to grow on an annual basis,” said Texas Comptroller Glenn Hegar on Thursday, noting that State Sales Tax Revenues totaled $3.81 billion for the month of October, down 0.3% from October 2022. 

“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," said Hegar.

“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," Hegar said.

“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,
    • and falling prices for some categories of goods such as electronics and depletion of excess savings that households had accumulated during the pandemic.
Receipts from restaurants grew only modestly and at less than the rate of inflation for food away from home. But spending for live entertainment continued to boom, spurring double-digit growth in receipts from music, arts and sporting events.”

Total sales tax revenue for the three months ending in October 2023 was up 2.7% compared with the same period a year ago. Sales tax is the largest source of state funding for the state budget, accounting for 57% of all tax collections.

Texas collected the following revenue from other major taxes:
 
  • Motor Vehicle Sales & Rental Taxes — $606 million, up 3% from October 2022;
  • Motor Fuel Taxes — $316 million, up 1% from October 2022;
  • Oil Production Tax — $586 million, up 8% from October 2022;
  • Natural Gas Production Tax — $192 million, down 53% from October 2022;
  • Hotel Occupancy Tax — $67 million, up 2% from October 2022; and,
  • Alcoholic Beverages Taxes — $154 million, up 2% from October 2022.
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.















 
Texas Comptroller Glenn Hegar by is licensed under
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