Texas Comptroller Glenn Hegar reported this week that state sales tax revenue totaled $3.56 billion in December, 24.4 percent more than in December 2020. The majority of December sales tax revenue is based on sales made in November and remitted to the agency in December.
Year-over-year increases for most tax revenues continue to be affected by base effects: year-ago revenue collections to which this year’s collections are compared were suppressed by the pandemic, Hegar said. Compared to December 2019, sales tax collections were up 18.1 percent.
“December state sales tax collections continued the exceptional growth of recent months, reaching another new monthly high with receipts from all major economic sectors surging above year-ago levels,” Hegar said. “Propelled by vigorous business and consumer spending, receipts from most major sectors were well above pre-pandemic levels.
“Double-digit increases in receipts from sectors fueled by business spending were led by oil and gas mining, manufacturing, wholesale trade and construction, with receipts from only the oil and gas mining and rental and leasing sectors remaining below pre-pandemic levels.
“With Christmas shopping jumpstarted by the early start of holiday promotional pricing weeks ahead of Black Friday, and despite supply chain clogs and household budgets pressured by rising prices for food and gasoline, consumer spending drove double-digit increases in receipts from retail trade.
“The sharpest increases in retail trade receipts were from electronics and appliance stores and clothing stores, two segments especially hard hit the previous year by the pandemic. But double-digit growth continued in receipts from home improvement and furniture stores, sporting goods and hobby stores, and online general merchandisers, segments boosted a year ago by pandemic spending patterns.
“Receipts from restaurants, another sector depressed a year ago, were also up sharply and well above pre-pandemic levels.”
Total sales tax revenue for the three months ending in December 2021 was up 22.9 percent compared to the same period a year ago and 16.8 percent compared to 2019. Sales tax is the largest source of state funding for the state budget, accounting for 59 percent of all tax collections.