Statewide NewsTaxes & SpendingComptroller Numbers Show May Sales Tax Revenue Down 13.2 Percent from 2019

Business closures and stay-home orders have caused Texas' consumption tax revenues to drop significantly. This May, compared to last, brought in $345 million fewer in sales tax revenues.
June 1, 2020
Texas Comptroller Glenn Hegar announced on Monday that the monthly total of sales tax revenue for May was $2.61 billion — down 13.2 percent from May of last year.

This marks the sharpest year-to-year decline since 2010.

These totals, while May revenue numbers, are mostly based on April consumer purchases.

April was the first full month in which the mandated business closures and stay home orders were in effect.

Hegar said in the release, “Significant declines in sales tax receipts were evident in all major economic sectors, with the exception of telecommunications services.

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“The steepest decline was in collections from oil and gas mining, as energy companies cut well drilling and completion spending following the crash in oil prices,” he further added.

The natural gas and oil production taxes are each down about 75 percent from last year. This will especially affect the state’s Rainy Day Fund as it is partially funded by the state’s severance tax revenues.

A drastic reduction in travel due to the coronavirus has caused the price of oil, especially, to crater from its pre-pandemic levels.

“The business closures and restrictions and stay-at-home orders due to the COVID-19 pandemic spurred deep drops in collections from restaurants, amusement and recreation services, and physical retail stores. These declines were offset in part by increases from big box retailers and grocery stores that remained open as essential businesses, online retailers and restaurants that could readily pivot to takeout and delivery service.”

Other categories with notable revenue declines are the motor vehicle sales and rental taxes, which dropped 38 percent from 2019; gasoline taxes, down 30 percent; alcoholic beverage taxes, down 76 percent; and the hotel occupancy taxes, down 86 percent.

The lattermost category’s depreciation has already been responsible for layoffs as the City of San Antonio furloughed 270 employees after seeing its hotel tax revenue sharply decrease.

Hegar concluded, saying, “With the easing of state and local government social distancing orders beginning in May, business activity in the sectors most affected by measures to curb the pandemic should begin to slowly recover, but operations resuming at reduced capacity will result in continued reductions in employment, income and activity subject to sales tax for months to come.”


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Brad Johnson

Brad Johnson is a senior reporter for The Texan and an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.

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