In what has become a monthly reminder of the serious effects of continuous economic shutdowns in response to the Chinese coronavirus, Comptroller Glenn Hegar announced on Tuesday that sales tax collections in November were down 6.3 percent from levels in 2019.
“November state sales tax collections continued the trends of recent months, with receipts down from a year ago in all major economic sectors other than retail trade,” said Hegar. “Increased collections from retail trade reflected continued heightened spending for home improvements in response to the pandemic.”
“With sales tax collection responsibility for online marketplaces and remote sellers now in place for more than a year, increased collections from online vendors reflected the pandemic-accelerated market share shift from in-store to online shopping. Receipts from restaurants remained down from last year but significantly higher than in the early days of the pandemic, as restrictions have eased on in-person dining and consumers continue to embrace pick-up and delivery restaurant service,” he added.
The state also collected the following revenue from other major taxes:
- Motor vehicle sales and rental taxes — $414 million, down 1.9 percent from November 2019;
- Motor fuel taxes — $325 million, down 0.6 percent from November 2019;
- Oil production tax — $199 million, down 42.2 percent from November 2019;
- Natural gas production tax — $76 million, down 36.3 percent from November 2019;
- Hotel occupancy tax — $33 million, down 46.1 percent from November 2019; and
- Alcoholic beverage taxes — $96 million, down 19.1 percent from November 2019.
In July, Hegar revised his biennial revenue estimate to project lawmakers would face a $4.6 billion budget shortfall when they return to Austin. At the time, though, he cautioned that prediction comes with “an unprecedented amount of uncertainty.” During a meeting of the Legislative Budget Board on Monday, however, Hegar indicated he believed the shortfall would not be as dire as previously predicted.
He is slated to give an updated estimate of revenue on January 11, 2021.
Passing a balanced budget is one of the state legislature’s only constitutional obligations. Lawmakers will have to grapple with the shortfall in 2021 by either raising taxes or reducing spending.