It’s the beginning of another month, which as of late has meant another report from the comptroller’s office showing a decline in sales tax collection in Texas compared to last year.
On Tuesday, Texas Comptroller Glenn Hegar said state sales tax revenue totaled $2.67 billion in June, 6.5 percent less than in June 2019.
Sales taxes remitted to the state in June consist mostly of taxes collected by businesses in May.
“The decline in state sales tax collections was driven principally by steep drops in remittances from oil- and gas-related sectors,” said Hegar. “Collections from the construction and amusement service sectors were also sharply down.”
The state’s sales tax is the biggest source of revenue for the state government—accounting for more than 57 percent of Texas’ total tax collections.
However, the state’s other taxes—including the motor vehicle sales tax, motor fuel tax, and hotel occupancy tax—were all down significantly as well, as they have been for the past several months, pointing again towards a significant budget deficit when the state legislature returns in January.
The decline is still an improvement over last month, in which sales tax collections plummeted over 13 percent over the previous year. That has to do, in large part, to the relaxing of social distancing requirements and government-mandated shutdowns in response to the Chinese coronavirus.
Since then, however, Gov. Greg Abbott has begun to rewind reopening plans, ratcheting back capacity in restaurants, prohibiting tubing and rafting businesses from operating, and shutting down bars again last week. Effects of the recent set of shutdown orders will not be realized later this summer.