Texas experienced a remarkable surge in state sales tax revenue in September, with collections climbing 11.5% to reach $4.4 billion. This increase was largely fueled by robust spending in various business sectors, particularly construction and manufacturing.
Comptroller Don Huffines highlighted that this consistent revenue growth positions lawmakers favorably to utilize the state’s surplus for alleviating property tax burdens affecting homeowners and businesses. He noted that maintaining a focus on property tax relief should remain a priority for the Legislature.
The September figures reflect economic activities and sales that occurred in August. The state’s revenue growth was significantly influenced by business expenditures across sectors such as mining, construction, manufacturing, wholesale trade, and real estate. It’s important to mention that last year’s collection numbers were somewhat lower due to increased refund activity.
Retail trade collections also experienced growth, rising by 3% year-on-year, although this was slightly behind the overall inflation rate of 3.4% as indicated by the Consumer Price Index. Notably, the largest increases within retail were seen in electronics and appliance stores, as well as automotive dealerships. Restaurant revenue grew by 2.5%, which still fell short of the inflation rate for dining out.
Year-to-date sales tax revenue for the calendar year has reached $39.6 billion, marking a 7.8% increase compared to the same time frame in 2025. Sales tax continues to be the largest source of funding for the state, accounting for 59% of all tax collections.
In addition to sales tax, Texas reported figures for other significant taxes in September, including:
- Motor vehicle sales and rental taxes: $684 million, up 5%
- Oil production tax: $507 million, up 14%
- Motor fuel taxes: $337 million, down 1%
- Natural gas production tax: $290 million, up 30%
- Alcoholic beverage taxes: $147 million, down 2%
- Hotel occupancy tax: $65 million, up 10%
