PRESS RELEASE: State Sales Tax Revenue Totaled $3.7 Billion in February

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March 1, 2023

State Sales Tax Revenue Totaled $3.7 Billion in February

(AUSTIN) — Texas Comptroller Glenn Hegar today said state sales tax revenue totaled $3.68 billion in February, 14.2 percent more than in February 2022. The majority of February sales tax revenue is based on sales made in January and remitted to the agency in February.

“Propelled by continued strong business spending and a surprising post-holiday surge in consumer spending, growth in February sales tax receipts significantly outpaced inflation, which is still hovering over 6 percent,” Hegar said. “Robust increases in receipts from all major sectors suggest economic activity in the state is not yet slowing significantly despite high interest rates and fears of recession.

“As has been the case in recent months, receipts from sectors driven primarily by business spending showed the greatest rates of growth, with receipts from the oil and gas mining, manufacturing and construction sectors coming in strongly above February 2022 totals.

“Remittances from the retail trade sector – the sector responsible for the largest portion of state sales tax – grew much faster than the rate of inflation for consumer goods. The retail segments with the fastest growth in tax receipts were general merchandise and clothing stores. 

“Receipts from the services sector were up double digits, led by receipts for live entertainment venues. Receipts from restaurants were also up double digits compared with February of last year, significantly outpacing the rate of inflation for food away from home.”

Total sales tax revenue for the three months ending in February 2023 was up 10.2 percent compared with the same period a year ago. Sales tax is the largest source of state funding for the state budget, accounting for 56 percent of all tax collections.

Texas collected the following revenue from other major taxes:

• motor vehicle sales and rental taxes — $542 million, up 14 percent from February 2022;
• motor fuel taxes — $304 million, up 1 percent from February 2022;
• oil production tax — $492 million, up 2 percent from February 2022;
• natural gas production tax — $305 million, down 5 percent from February 2022;
• hotel occupancy tax — $42 million, up 2 percent from February 2022; and
• alcoholic beverage taxes — $130 million, up 13 percent from February 2022.

For details on all monthly collections, visit the Comptroller’s Monthly State Revenue Watch. For an extensive history of tax policy developments and fees since 1972, visit our updated Sources of Revenue publication.