January 4, 2021

State Sales Tax Revenue Totaled $2.9 Billion in December

(AUSTIN) — Texas Comptroller Glenn Hegar today said state sales tax revenue totaled $2.86 billion in December, 5 percent less than in December 2019.

The majority of December sales tax revenue is based on sales made in November and remitted to the agency in December.

"December sales tax collections continued recent trends, with receipts from most major economic sectors significantly down from a year ago," Hegar said. "Retail trade was the principal exception, with the strongest gains coming from online general merchandisers, building materials and home improvement stores, warehouse clubs and supercenters and sporting goods and hobby stores.

"Collections from discount retailers also were up, while collections from department stores, clothing stores and other specialty retailers generally were down. Receipts from the wholesale trade sector also were slightly up, due to strength in sales by building materials vendors. Historically low interest rates and pandemic-motivated behavior changes continue to spur a boom in single-family housing starts and home renovations.

"Receipts from restaurants, entertainment venues and personal service and tourism-related businesses continue to be depressed. Receipts from oil- and gas-related sectors also were lower year over year as drilling activity remained subdued."

Total sales tax revenue for the three months ending in December 2020 was down 5 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 COVID-19 pandemic continued to be evident in some sources of revenue in December 2020.

Texas collected the following revenue from other major taxes:

• motor vehicle sales and rental taxes — $439 million, up 2.7 percent from December 2019;
• motor fuel taxes — $278 million, down 10.6 percent from December 2019;
• oil production tax — $197 million, down 45.5 percent from December 2019;
• natural gas production tax — $86 million, down 25 percent from December 2019
• hotel occupancy tax — $26 million, down 48.5 percent from December 2019; and
• alcoholic beverage taxes — $84 million, down 28.5 percent from December 2019.

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.