State Sales Tax Revenue Totaled $4.5 Billion in May
(AUSTIN) — Acting Texas Comptroller Kelly Hancock today said state sales tax revenue totaled $4.5 billion in May, 6.6 percent more than in May 2025. The majority of May sales tax revenue is based on sales made in April and remitted to the agency in May.
“State sales tax collections showed solid growth well above the rate of general price inflation last month, driven in large part by strong increases in certain sectors influenced by business spending,” Hancock said. “Results from nearly all major economic sectors were positive.”
Receipts from the sectors mainly affected by business spending were overall very robust compared with a year ago, with the manufacturing and construction sectors both exhibiting growth of more than 15 percent. Remittances from the wholesale trade sector came in nearly 6 percent more than their May 2025 total. Collections from the mining sector were down slightly.
Among the large sectors driven primarily by consumer spending, remittances from the largest sector, retail trade, were up more than 3 percent compared with last May, and remittances from the services sector increased by more than 8 percent. Within the retail trade sector, collections from electronic shopping outlets were up more than 13 percent and general merchandise stores remitted nearly 2 percent more than in May 2025.
Receipts from restaurants were up 4.3 percent from a year ago, above the rate of inflation for food away from home.
Total sales tax revenue for the three months ending in May 2026 was up 8.7 percent compared with the same period a year ago. Sales tax is the largest source of state funding for the state budget, accounting for 58 percent of all tax collections.
Texas collected the following revenue from other major taxes:
- motor vehicle sales and rental taxes — $599 million, down 13 percent from May 2025;
- motor fuel taxes — $333 million, down 2 percent from May 2025;
- oil production tax — $677 million, up 64 percent from May 2025;
- natural gas production tax — $217 million, down 4 percent from May 2025;
- hotel occupancy tax — $74 million, up 6 percent from May 2025; and
- alcoholic beverage taxes — $156 million, up less than 1 percent from May 2025.
Fiscal 2026 franchise tax collections totaled $6.5 billion year-to-date through May. Compared with collections through May 2025, year-to-date franchise tax collections were down 0.5 percent, lower than was projected in the Comptroller’s 2026-27 Certification Revenue Estimate. Franchise tax reports are due on May 15, though entities may request an extension until November 15. Accordingly, franchise tax revenue from the most recent report year will continue to be received through November 2026.
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.
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