Texas collected $2.67 billion in sales taxes in June, a 6.5% drop compared to last year.
Although down, this number for sales taxes mostly collected during May is a significant improvement over the previous month, when total sales tax collected was $2.61 billion, down 13.2% from the previous year. That marked the steepest year-over-year decline since January 2010.
Texas Comptroller Glenn Hegar attributed the improvement to the easement of business shutdowns and social-distancing rules in May.
The negative news in the latest report, Hegar said Wednesday, was the “steep drops in remittances from oil- and gas-related sectors. Collections from the construction and amusement service sectors were also sharply down.”
Hegar said sales tax collections from restaurants were also down for the month, but he said the extent of the downturn was checked somewhat by restaurants turning to increased takeout and delivery sales.
“Retail trade receipts rose significantly, buoyed by increased online shopping and building material purchases, as business premises were modified for COVID-19 precautions,” Hegar said.
“Retail sales likely also were boosted by increased alcoholic beverage sales at package, grocery and convenience stores,” he added. “That’s because this category of spending shifted from restaurant and bar on-premise consumption, subject to mixed beverage taxes, to purchases for at-home consumption subject to sales tax.”
Vendors of computer hardware and software products also saw an uptick as businesses spent on facilitating teleworking, Hegar added.
Total sales tax revenue for the three months ending in June 2020 was down 9.7% compared to the same period a year ago.
Sales tax is the largest source of state funding for the state budget, accounting for 57% of all tax collections, but the effects of the economic slowdown and low oil prices also were evident in other sources of revenue in June 2020.
In other tax revenue categories, motor vehicle sales and rental taxes were down 7.6% from a year ago at $394 million.
Motor fuel taxes, perhaps reflecting stay-at-home directives and reduced tourist travel, were down 24% at $250 million.
Natural gas production taxes were $20 million, down 84% from last year, and oil production taxes were down 77% at $83 million.
The hotel occupancy tax was down 61% for the month at $23 million, and alcoholic beverage taxes were $65 million, down 47%, although significantly better than in the previous month’s report.