Texas Comptroller of Public Accounts
FOR IMMEDIATE RELEASE
September 1, 2020
(AUSTIN) — Texas Comptroller Glenn Hegar today released totals for fiscal 2020 state revenues, in addition to announcing monthly state revenues for August.
“Yearly revenues were slightly ahead of our projections in the revised Certification Revenue Estimate (CRE) released in July,” Hegar said. “This was, in part, due to surprisingly strong July sales tax collections as Texans’ spending for home improvement projects increased while they spent more time at home both for teleworking and staycations, in lieu of leisure travel.
“Those July gains, however, were largely reversed in August, bringing actual collections closer to, but still ahead of, our estimate.”
The Economic Stabilization Fund (ESF) and State Highway Fund (SHF) both receive funding from oil and natural gas severance taxes. In November, the Comptroller’s office will deposit $1.13 billion in each of those funds, down from the $1.67 billion deposited in each fund in November 2019.
Hegar also said state sales tax revenue totaled $2.82 billion in August, 5.6 percent less than in August 2019.
The majority of August sales tax revenue is based on sales made in July and remitted to the agency in August. Rising COVID-19 infection rates in July likely suppressed economic activity.
“State sales tax collections from all major sectors other than retail trade declined significantly from year ago levels, with the largest declines in the oil- and gas-related sectors,” Hegar said. “Collections from retail trade were up, as increased consumer spending on home improvements, home entertainment, distance learning and outdoor recreation in response to the COVID-19 pandemic spurred higher remittances from building materials, home furnishing, electronics and appliance, and sporting goods retailers. Retail trade tax collections were also boosted by online out-of-state vendors and marketplace providers who did not have tax collection obligations a year ago. Tax remittances from the information sector were depressed, as federal law in July began prohibiting sales taxation of internet service.
“Consumer spending was supported in July by enhanced federal benefits, which have since been reduced or expired. Consequently, further declines in sales tax revenue may ensue in the coming months.”
Total sales tax revenue for the three months ending in August 2020 was down 2.7 percent compared to the same period a year ago. Sales tax is the largest source of state funding for the state budget, accounting for 59 percent of all tax collections. The effects of the economic slowdown and low oil prices also were evident in other sources of revenue in August 2020.
Texas collected the following revenue from other major taxes in August:
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.