January 3, 2022

State Sales Tax Revenue Totaled $3.6 Billion in December

(AUSTIN) — Texas Comptroller Glenn Hegar today said state sales tax revenue totaled $3.56 billion in December, 24.4 percent more than in December 2020. The majority of December sales tax revenue is based on sales made in November and remitted to the agency in December.

Year-over-year increases for most tax revenues continue to be affected by base effects: year-ago revenue collections to which this year’s collections are compared were suppressed by the pandemic. Compared to December 2019, sales tax collections were up 18.1 percent.

“December state sales tax collections continued the exceptional growth of recent months, reaching another new monthly high with receipts from all major economic sectors surging above year-ago levels,” Hegar said. “Propelled by vigorous business and consumer spending, receipts from most major sectors were well above pre-pandemic levels.

“Double-digit increases in receipts from sectors fueled by business spending were led by oil and gas mining, manufacturing, wholesale trade and construction, with receipts from only the oil and gas mining and rental and leasing sectors remaining below pre-pandemic levels.

“With Christmas shopping jumpstarted by the early start of holiday promotional pricing weeks ahead of Black Friday, and despite supply chain clogs and household budgets pressured by rising prices for food and gasoline, consumer spending drove double-digit increases in receipts from retail trade.

“The sharpest increases in retail trade receipts were from electronics and appliance stores and clothing stores, two segments especially hard hit the previous year by the pandemic. But double-digit growth continued in receipts from home improvement and furniture stores, sporting goods and hobby stores, and online general merchandisers, segments boosted a year ago by pandemic spending patterns.

“Receipts from restaurants, another sector depressed a year ago, were also up sharply and well above pre-pandemic levels.”

Total sales tax revenue for the three months ending in December 2021 was up 22.9 percent compared to the same period a year ago and 16.8 percent compared to 2019. Sales tax is the largest source of state funding for the state budget, accounting for 59 percent of all tax collections.

Texas collected the following revenue from other major taxes, most of which were up sharply from a year ago due to base effects:

• motor vehicle sales and rental taxes — $531 million, up 21 percent from December 2020, and up 24 percent from December 2019;
• motor fuel taxes — $312 million, up 12 percent from December 2020, and up less than 1 percent from December 2019;
• oil production tax — $450 million, up 128 percent from December 2020, and up 24 percent from December 2019;
• natural gas production tax — $384 million, the highest-ever monthly revenue amount, up 349 percent from December 2020, and up 237 percent from December 2019;
• hotel occupancy tax — $40 million, up 57 percent from December 2020, and down 19 percent from December 2019; and
• alcoholic beverage taxes — $124 million, up 47 percent from December 2020, and up 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.