Retail sales strong, others lagging

Strong retail sales remain one of the few bright spots in the latest report on sales tax revenue from the Texas Comptroller’s Office.

Sales tax revenues reported this past week showed a total of $2.72 billion for October, most of which is based on sales made in September.

“October sales tax collections from all major economic sectors declined significantly from year-ago levels, with the exception of collections from retail trade,” Comptroller Glenn Hegar said. “The steepest declines were in receipts from oil- and gas-related sectors, with the rate of well drilling activity depressed almost 75 percent from the previous year.”

Total sales tax revenue for the three months ending in October 2020 was down 5.1 percent compared to the same period a year ago.

Sales tax is the largest source of state funding for the state budget, accounting for 59 percent of all tax collections. The effects of the COVID-related economic slowdown are evident in other sources of revenue as well.

Breaking down the categories, motor vehicle sales and rental fees were $455 million, down 6.1 percent from a year ago.

Likewise, motor fuel taxes were $286 million, down 8.3 percent from October of last year.

Oil production tax collected was $200 million, down 42.2 percent, and the sales tax on natural gas production was $57 million, down 32.9 percent year-over-year.

The hotel occupancy tax was $33 million, down 33.3 percent, and the alcoholic beverage tax was $88 million, down 24.2 percent.

“Receipts from retail trade increased, as adaptation to pandemic circumstances has spurred increased spending on building materials, home furnishings, sporting goods and alcohol for off-premise consumption, while spending at bars and entertainment venues has languished,” Hegar said.

“Receipts from restaurants also remain down from a year ago, though significantly higher than in the spring, with some resumption of dine-in service after relaxation of capacity limits as well as increased sales of meals for pick-up or delivery,” he added. “In a departure from recent trends, receipts from clothing stores were up from a year ago for the first time since the onset of the pandemic.”

rkelley@valleystar.com