State sales tax revenue in Texas reached $4 billion in February, marking a 3.8 percent increase compared to the same month last year, according to Acting Texas Comptroller Kelly Hancock. The majority of these collections are based on sales from January that were remitted in February.
“Texas continues to show steady economic momentum,” Hancock said. “Sales tax remains the backbone of our state budget, and these numbers reflect a resilient Texas economy that continues to outpace inflation and support responsible, conservative budgeting.”
Collections from sectors driven mainly by business spending showed mixed results. While the construction and manufacturing sectors saw slight declines compared to February 2025, wholesale trade increased by more than 8 percent. The mining sector experienced a significant decrease, attributed partly to higher refund activity.
Consumer-driven sectors performed better last month. Receipts from services rose nearly 10 percent, and retail trade—the largest sector—grew by over 4 percent year-over-year. Within retail trade, electronics and appliance stores as well as sporting goods and hobby stores reported growth exceeding 10 percent. However, home improvement stores and furniture retailers saw decreases.
Restaurant receipts increased by more than 4 percent compared to the previous year, slightly surpassing the inflation rate for food away from home.
For the three months ending in February 2026, total sales tax revenue was up 5.6 percent over the same period last year. Sales tax accounts for about 58 percent of all state tax collections.
Other major taxes collected included $641 million from motor vehicle sales and rental taxes (down 1 percent), $310 million from motor fuel taxes (up less than 1 percent), $386 million from oil production tax (down 21 percent), $181 million from natural gas production tax (down 18 percent), $51 million from hotel occupancy tax (down 11 percent), and $126 million from alcoholic beverage taxes (down 2 percent).
More information on monthly collections is available at the Comptroller’s Monthly State Revenue Watch and an extensive history of state tax policy can be found in the updated Sources of Revenue publication.
