With less sales tax revenue slumping this past month, is this a sign of a weakening economy?
Texas Comptroller Glenn Hegar released the state sales teax revenue information last Thursday, Feb. 1, 2024, which state sales tax revenue totaled $4.02 billion in January, and is 2% percent less than in January 2023. The majority of January sales tax revenue is based on sales made in December and remitted to the agency in January.
Although the state as a whole is down in sales tax revenue, the City of Brownfield is up 8.11% from the same time last year (Jan. 2023) bringing in $130,727.97 compared to the $120,914.77 brought in last year. Unfortunately, Terry County is down 3.41% which was $64,155.26 to $61,961.67 this year.
The City of Meadow is up 28.48% bringing in $2,439.73 compared to $1,898.88 last year in January 2023. The City of Wellman is the big winner in the county. Wellman’s sales tax is up 62.29% bringing in $933.19. This time last year, Wellman brought in $574.98. According to Hegar, the economy is beginning to look weaker than expected.
“For the second time since pandemic restrictions were lifted, monthly state sales tax collections fell compared with the same month the year before,” Hegar said. “A contributing factor was higher-than-normal refund activity, but several sectors that have been trending downwards in recent months continued to show weakness in January.
“Remittances from the wholesale trade sector were down for the ninth time in 10 months, and receipts from manufacturing were down for the fourth time in five months. Receipts from the oil and gas mining sector were down for the second month in a row. In the major sectors driven primarily by business spending, remittances from the construction sector were the lone positive standout, increasing by mid-single digits compared with a year ago.
“Overall, receipts from the consumer-driven retail trade sector were just slightly above last year, but with receipts from most retail subsectors down. Receipts from electronics and appliance stores were down the most, followed by declines from clothing and apparel stores. Remittances from home improvement centers and furniture and home goods stores continued to decline significantly, as has been the case in recent months following the pandemic-spurred boom in those categories. Receipts from general merchandisers also fell. Receipts from online merchants were the bright spot among the large retail trade subsectors, with remittances coming in strongly over January 2023 totals.
“Receipts from restaurants grew in the mid-single digits and slightly higher than the inflation rate for food away from home.”
Total sales tax revenue for the three months ending in January 2024 was up 1.6 percent compared with the same period a year ago. Sales tax is the largest source of state funding for the state budget, accounting for 57 percent of all tax collections.
Texas collected the following revenue from other major taxes:
- motor vehicle sales and rental taxes — $618 million, up 9 percent from January 2023;
- motor fuel taxes — $307 million, down 1 percent from January 2023;
- oil production tax — $500 million, up 3 percent from January 2023;
- natural gas production tax — $188 million, down 41 percent from January 2023;
- hotel occupancy tax — $25 million, down 54 percent from January 2023; and
- alcoholic beverage taxes — $154 million, down 1 percent from January 2023.
