Texas – State Sales Tax Revenue Totaled Nearly $3 Billion in July

(AUSTIN) — Texas Comptroller Glenn Hegar today said state sales tax revenue totaled $2.98 billion in July, 4.3 percent more than in July 2019.

The majority of July sales tax revenue is based on sales made in June and remitted to the agency in July. Widespread social distancing requirements were more relaxed across the state in June than in previous months.

“Collections from e-commerce were up sharply, as many consumers chose to shop online rather than at brick-and-mortar stores. Also, more online marketplace and remote vendors are required to collect and remit Texas tax following the Wayfair decision and subsequent legislation passed last session. Increased time spent at home both for teleworking and staycations, in lieu of leisure travel, spurred sharply higher spending for home improvements.

“Collections from food and beverage stores also were up strongly, as consumers replaced purchases of alcohol from restaurants and bars with alcohol purchased for off-premise consumption (alcohol sales at bars and restaurants are subject to mixed beverage taxes, not sales and use tax),” Hegar said. “Collections from sporting goods stores also rose significantly, as consumers turned to home workouts, bicycling, boating, camping and other forms of outdoor recreation consistent with social distancing.

“With about 1.3 million Texans with continued claims for insured unemployment and another 184,000 receiving benefits under the Pandemic Unemployment Assistance program in June, it’s likely that consumer spending was significantly supported by enhanced benefits provided by the federal CARES Act and related legislation enacted in response to the COVID-19 pandemic. With the expiration of these benefits at the end of July, consumer spending and sales tax collections may decline in coming months.”

Total sales tax revenue for the three months ending in July 2020 was down 5.3 percent compared to the same period a year ago. Sales tax is the largest source of state funding for the state budget, accounting for 57 percent of all tax collections. The effects of the economic slowdown and low oil prices were more evident in other sources of revenue in July 2020, though most were improved compared to previous months.

For more information please visit: comptroller.texas.gov

Texas comptroller of public accounts
august 3, 2020