Struggles in Texas’ oil and gas industry continue to impact the state’s sales tax revenue.
Texas’ sales tax revenue dropped 4 percent in January, compared with the same month last year, according to the Texas comptroller’s office.
That marked the fourth consecutive month in which the sales tax revenue has declined, according to data from the comptroller’s office.
Sales tax revenue in January was $2.47 billion, the comptroller’s office said, down from $2.56 billion in January 2015.
Texas Comptroller Glenn Hegar pointed out that sales tax revenue in January 2015 was a record, which impacted the decline to January of this year, but acknowledged that the ongoing struggle in the Texas energy sector is leaving its mark on the state’s revenues.
In fact, sales tax revenue in the oil and natural gas production sector was down 45 percent from the same month last year, according to the comptroller’s office.
“As expected, reduced spending in oil and gas-related sectors resulted in a fall in total sales tax revenue,” Hegar said in a written statement. “Collections from industries mainly driven by consumer spending, including retail trade, restaurants and services, continued to grow, as did receipts from the construction sector.”
Sales tax revenue in the motor vehicle sales and rental sector was down 3.9 percent for the month, the comptroller’s office said, while motor fuel taxes edged up 1.4 percent from January 2015.
Overall, the state’s sales tax revenue collection has slowed in the past 10 months. December’s revenue was down 1.1 percent, November saw a 3.3 percent decline and October had a 5.4 percent year-over-year decline, according to the comptroller’s office.
Collections edged up 1.9 percent in September, but declined 0.04 percent in August and dropped 1.4 percent in July. Meanwhile, year-over-year gains were small in every other month since March — 1.5 percent in March, 1.1 percent in April, 1.1 percent in May and 2.7 percent in July.
Sales tax is a key source of revenue for state government, funding a number of services from schools to prisons. The sales tax figures mostly reflect sales made in December. The tax was collected in January and is distributed in February.
The comptroller’s office has not yet reported what the sales tax allocation will be this month for cities and counties.