State sales tax revenue totaled $3.4 billion in March

AUSTIN — Texas Comptroller Glenn Hegar today said state sales tax revenue totaled $3.37 billion in March, 28.5 percent more than in March 2021; however, after adjusting last year’s March totals to account for February sales tax returns not collected until March 2021 due to Winter Storm Uri, March 2022 sales tax revenue was up 37.2 percent over comparable collections last year.

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

“State sales tax collections reached a new high for the month of March, with exceptionally strong growth evident across all major economic sectors,” Hegar said.

“Surging consumer spending as the omicron wave recedes — supported by strong employment and wage growth and savings accumulated during the pandemic — spurred double-digit growth in receipts from almost all retail segments. Receipts from segments stimulated by pandemic spending patterns, including online general merchandisers and home improvement, furniture and sporting goods stores, continue to exhibit very strong growth, while receipts from clothing and accessories stores and electronics and appliance stores, segments depressed by the pandemic, continue to rebound.

“Growth in receipts from sectors driven by business spending, including oil and gas mining, construction, manufacturing, and wholesale trade, also continues to be robust, though receipts from oil and gas mining still remain well below pre-pandemic levels despite the elevated energy prices of recent months.”

Total sales tax revenue for the three months ending in March 2022, after adjusting for March 2021 activity, was up 27.3 percent compared to the same period a year ago.

Sales tax is the largest source of state funding for the state budget, accounting for 59 percent of all tax collections.

Texas collected the following revenue from other major taxes, some of which also were affected by the February returns delayed to March due to Winter Storm Uri:

• motor vehicle sales and rental taxes — $386 million, down 17 percent from March 2021;
• motor fuel taxes — $276 million, up 19 percent from March 2021;
• oil production tax — $476 million, up 101 percent from March 2021;
• natural gas production tax — $348 million, up 150 percent from March 2021;
• hotel occupancy tax — $50 million, up 55 percent from March 2021; and
• alcoholic beverage taxes — $123 million, up 27 percent from March 2021.