February 3, 2025

State Sales Tax Revenue Totaled $4.3 Billion in January

(AUSTIN) — Texas Comptroller Glenn Hegar today said state sales tax revenue totaled $4.3 billion in January, 6.8 percent more than in January 2024. The majority of January sales tax revenue is based on sales made in December and remitted to the agency in January. For an extensive history of tax policy developments and fees since 1972, visit the agency’s recently updated Sources of Revenue publication.

“State sales tax collections grew steadily compared with January 2024, coming in at above the rate of general price inflation, which remains slightly elevated,” Hegar said. “This followed only meager growth in the previous month — average growth for the last three months outpaces inflation by a slim margin.

“There were gains in receipts from most sectors, most notably from the services, information and retail trade sectors, with retail trade results improving as holiday spending shifted into December following a Thanksgiving shopping season that was somewhat muted and fell late in the month.

“Services sector growth was principally due to increases from technology service and facilities management companies, while remittances for live entertainment events declined from a year ago.

“Sectors driven mainly by business spending were generally positive last month, with the construction sector up slightly while manufacturing and wholesale trade sectors had moderate growth. The lone exception among these sectors was the mining sector, which was down for the 10th consecutive month.

“Retail trade, the largest sector, grew by more than 5 percent compared with a year ago. Within the retail trade sector, holiday-driven receipts from online shopping and general merchandise stores were strong, while receipts from home improvement and furniture stores were both down compared with the same month a year ago.

“Receipts from restaurants increased slightly from a year ago, coming in below the rate of inflation for food away from home for December.”

Total sales tax revenue for the three months ending in January 2025 was up 4.2 percent compared with the same period a year ago. Sales tax is the largest source of state funding for the state budget, accounting for 58 percent of all tax collections.

Texas collected the following revenue from other major taxes:

• motor vehicle sales and rental taxes — $589 million, down 5 percent from January 2024;
• motor fuel taxes — $313 million, up 2 percent from January 2024;
• oil production tax — $471 million, down 6 percent from January 2024;
• natural gas production tax — $174 million, down 8 percent from January 2024;
• hotel occupancy tax — $47 million, up 90 percent from January 2024, which was unusually low because of a high transfer to the city of Dallas project finance zone; and
• alcoholic beverage taxes — $155 million, up 1 percent from January 2024.

For details on all monthly collections, visit the Comptroller’s Monthly State Revenue Watch.