Acting Texas Comptroller Kelly Hancock said on Apr. 1 that state sales tax revenue reached $4 billion in March, representing a 10 percent increase compared to March of the previous year. Most of the March collections are based on sales made in February and remitted to the agency in March.
The announcement highlights continued economic growth across Texas, with state sales tax collections rising at their fastest rate since February 2023. Sales tax is the largest source of funding for the state budget, making up 58 percent of all tax collections.
“State sales tax collections in March grew at the fastest rate since February 2023, propelled by a robust Texas economy with growth once again well above the rate of general price inflation,” Hancock said. “Growth was particularly strong in sectors influenced primarily by business spending for the second month in a row, while receipts from the retail trade sector grew at their fastest pace since the pandemic.”
Business-related sectors such as wholesale trade, construction, and mining all saw double-digit increases compared to last year. The manufacturing sector rose about seven percent over last March. Retail trade—the largest sector—was up more than nine percent from a year ago, marking its strongest monthly gain since June 2022 when remittances were still recovering from pandemic lows. Electronic shopping subsector receipts increased by more than sixteen percent over last year, while clothing and accessory stores, health and personal care stores, and general merchandise stores also posted strong results. Service sector remittances were nearly nine percent higher than last March.
Receipts from restaurants increased by more than seven percent compared to a year ago—outpacing inflation for food away from home.
For other major taxes collected by Texas: motor vehicle sales and rental taxes totaled $415 million (down twenty-three percent); motor fuel taxes reached $303 million (up three percent); oil production taxes brought in $378 million (down eleven percent); natural gas production taxes amounted to $180 million (down thirty-eight percent); hotel occupancy taxes totaled $65 million (up twelve percent); and alcoholic beverage taxes were $142 million (up two percent) compared with figures from March of last year.
Total sales tax revenue for the three months ending in March was up nearly seven percent compared with the same period a year ago.
