Texas sales tax revenue topped $3 billion in January but fell just shy of the total collected one year earlier.
At $3.07 billion, the January collections were 0.3% below those of January 2020, the last time monthly revenues exceeded $3 billion.
The majority of January sales tax revenue is based on sales made in December and remitted to the agency in January.
“The slight decline in total sales tax revenue masks starkly contrasting results among economic sectors, with strong gains in collections from retail trade offset by continued deep declines in collections from recreational services and the oil- and gas-related sectors,” Texas Comptroller Glenn Hegar said.
“Stay-at-home spending trends that emerged in response to the COVID-19 pandemic continued through the Christmas shopping season, with elevated receipts coming from online vendors, electronics and appliance stores, building materials and home furnishings stores, big box general merchandisers and sporting goods stores,” he added.
Taxes on motor fuel, oil and gas production, vehicle sales and rentals, hotel stays and alcoholic beverages were all down, according to the report.
“While oil and gas well drilling activity has risen from lows reached earlier in the pandemic, the December active rotary rig count for Texas was still more than 60% lower than a year ago, depressing sales tax receipts from mining, construction, manufacturing and equipment rental and leasing businesses,” Hegar said.
“Receipts from restaurants also remained below levels seen a year ago, while receipts from recreational services — such as live music venues, amusement parks, bowling centers and fitness clubs — remained severely depressed.”
Total sales tax revenue for the three months ending in January 2021 was down 3.9% 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.
The January report comes as the Texas Legislature enters the second month of its 87th session.