Texas $2.5B Sales Tax Revenue In November Drops By 3 Percent From Last Year

AUSTIN, TX — The Texas comptroller said on Friday that state sales tax revenue totaled $2.51 billion in November, a drop of nearly 3 percent from last year's comparable period.

The totals for last month represent a 2.9 percent drop from November 2015, Texas Comptroller Glenn Hegar said. He attributed the drop to continued lower trends in key sectors even as restaurant and retail receipts grew slightly from the same period last year.

“Continued weakness in the manufacturing and wholesale trade sectors, combined with persistently lower levels of oil and gas drilling activity compared to the same period last year, is exerting ongoing downward pressures on sales tax revenues,” Hegar said. “Receipts from restaurants and retail trade grew modestly. While those industries are larger individual sources of sales tax revenue, their modest growth was not sufficient to overcome the combined drop in tax collections from manufacturing, wholesale trade, and oil- and gas-related sales tax receipts.”

Total sales tax revenue for the three months ending in November 2016 was down by 2.2 percent compared with the same period a year ago, the comptroller reported.

Sales tax revenue is the largest source of state funding for the state budget, accounting for 58 percent of all tax collections, the comptroller noted. Motor vehicle sales and rental taxes, motor fuel taxes and oil and natural gas production taxes also are large revenue sources for the state, he added.
In November 2016, Texas collected the following revenue from those taxes:

• motor vehicle sales and rental taxes — $380.2 million, up 7.3 percent from November 2015;
• motor fuels taxes — $303.1 million, up 2.8 percent from November 2015; and
• oil and natural gas production taxes — $253.5 million, up 2.2 percent from November 2015. Note: Year-over-year severance tax revenue had been declining the last 22 months, with oil tax revenue declining the last 23 months.

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