Texas Sales Tax Revenue Increased 4.1% In May 2022


(AUSTIN) – According to Texas Comptroller Glenn Hegar, state sales tax collections in May totaled $3.84 billion, 4.1 percent more than in May 2022. The majority of May’s sales tax collection is based on April sales that were paid to the agency in May.

In May, the state’s sales tax revenue totaled $3.8 billion. (Photo: smcorridornews)

Remittances From Other Sectors Stalled, With Retail Trade Receipts Falling Below Year-ago Levels

“While receipts from the oil and gas mining sector continued to grow significantly year on year, with remittances nearly 50% higher than the same month last year, growth in receipts from other sectors driven by business spending stalled.” Construction, manufacturing, and wholesale trade receipts are barely above year-ago levels.

“Remittances from the retail trade sector were negative in May compared to May last year, marking the second month in a row that retail trade receipts have fallen below year-ago levels.” Building materials and home improvement stores, clothes and accessory stores, electronics and appliance stores, furniture and home goods stores, general merchandisers, and sporting and hobby stores also experienced declines.

“In April, restaurant receipts increased at roughly the inflation rate for food away from home.”

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Sales And Franchise Tax Collections Increase Due To The Pandemic And Inflation

Total sales tax collection for the three months ending May 2023 increased by 5.6 percent over the same time last year. The sales tax is the most important source of state funding for the state budget, accounting for 56% of total tax collections.

Other significant taxes in Texas generated the following revenue:

  • motor vehicle sales and rental taxes — $599 million, down 1 percent from May 2022;
  • motor fuel taxes — $340 million, up 6 percent from May 2022;
  • oil production tax — $497 million, down 17 percent from May 2022;
  • natural gas production tax — $199 million, down 52 percent from May 2022;
  • hotel occupancy tax — $71 million, up 4 percent from May 2022; and
  • alcoholic beverage taxes — $156 million, up 2 percent from May 2022.

Through May, fiscal 2023 franchise tax collections reached $6.22 billion. Year-to-date franchise tax collections were up 20.7 percent compared to May 2022, an unprecedented gain driven by boom circumstances in 2022 following the pandemic and pricing dynamics in the high inflation environment driving business revenues up faster than costs.

Visit the Comptroller’s Monthly State Revenue Watch for further information on all monthly collections. Visit our revised Sources of Revenue brochure for a comprehensive history of tax policy developments and fees since 1972.

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