State sales tax revenue totals more than $3.1 billion in June

Texas Comptroller Glenn Hegar said state sales tax revenue totaled $3.16 billion in June, 18.1% more than in June 2020. Year-over-year increases for most tax revenues this month were affected by base effects: Year-ago revenue collections to which this year’s collections are compared were severely suppressed by the pandemic. Compared to June 2019, sales tax collections were up 10.4%.

The majority of June sales tax revenue is based on sales made in May and remitted to the agency in June.

“Monthly state sales tax collections remained exceptionally strong, with receipts from all major sectors other than those related to oil and gas surpassing pre-pandemic levels,” Hegar said in a statement. “Elevated spending at clothing stores, electronics and appliance stores, sporting goods stores, building materials and home furnishing stores, some general merchandisers and online retailers continued, though growth in online sales and at big box merchandisers slowed as consumers returned to other physical retail alternatives.”

He said remittances from food and beverage stores were constrained by declining sales of alcoholic beverages for off-premises consumption, as consumers returned to restaurants and bars.

“Collections from electric utilities were up strongly, reflecting air-conditioning usage at shopping centers and office buildings that were subject to closure a year ago. Receipts from the manufacturing and wholesale trade sectors also were up substantially, reflecting continued strong demand for computer products and building materials,” he added. 

Receipts from the information sector remained below last year’s levels, due to the federal preemption of state taxation of internet access services.

“Receipts from restaurants again substantially surpassed pre-pandemic levels, with brisk business continuing at take-out-oriented establishments and modest recovery at some dine-in outlets,” Hegar said. “However, some dine-in restaurant chains continue to operate at lower levels due to permanent closures at some locations.” 

Total sales tax revenue for the three months ending in June 2021 was up 26.4% compared to the same period a year ago and 14.1% compared to 2019. Sales tax is the largest source of state funding for the state budget, accounting for 59% of all tax collections. 

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

• Motor vehicle sales and rental taxes — $591 million, a record monthly amount; up 50% from June 2020, and up 39% from June 2019;
• Motor fuel taxes — $315 million, up 26% from June 2020, and down 4% from June 2019;
• Oil production tax — $363 million, up 339% from June 2020, and down 0.1% from June 2019;
• Natural gas production tax — $159 million, up 689% from June 2020, and up 28% from June 2019;
• Hotel occupancy tax — $54 million, up 137% from June 2020, and down 7% from June 2019; and
• Alcoholic beverage taxes — $138 million, a record monthly amount; up 112% from June 2020, and up 12% from June 2019.

Fiscal 2021 franchise tax collections, the reporting deadline for which was deferred to June from the usual May 15 due date, totaled $4.24 billion year-to-date through June. Last year, the due date was deferred to July. Compared to collections through July 2020, year-to-date franchise tax collections were up 1.7%.