Tue, Aug 2, 2022 10:47 AM
By Bethany Blankley, The Center Square
The $3.88 billion in sales tax revenue the state collected in July was the most in Texas history.
Texas Comptroller Glenn Hegar said the revenue it collected was 14.7% more than what it collected in July 2021.
July sales tax revenue, “the highest monthly collections on record,” is based on sales made in June and remitted to the state agency in July.
Sales tax revenue is the largest source of funding for the state budget, accounting for 59% of all tax collections.
“July state sales tax collections showed continued vigorous growth from non-retail sectors,” Hegar said. “The sharpest increase from a year ago was once again in receipts from oil and gas mining, but receipts from the construction, manufacturing and wholesale trade sectors were also up by double digits for the eighth consecutive month.”
The record was made possible by a record amount of production taxes paid by the oil and natural gas industry.
Texas oil producers paid $694 million in production taxes, the highest monthly collection on record, up 84% from July 2021.
Natural gas production taxes also reached a record high in July of $532 million, up 185% from July 2021.
The monthly totals surpassed average annual revenues from a few decades ago.
The natural gas industry paid $925 million in taxes in fiscal 2020. It’s now on track to generate $4.69 billion by fiscal 2023, which begins Sept. 1, an increase of 407%.
Oil production taxes are expected to grow from $3.23 billion to $6.58 billion, an increase of 104%, the Texas Oil and Gas Association said.
“Texas' all-time monthly records for oil and natural gas production tax collections were shattered again in July, reminding Texans of the vast benefits our state enjoys as the top oil and natural gas producing state in the nation,” Todd Staples, president of the Texas Oil and Gas Association, said. “These benefits extend beyond Texas’ borders though as our nation and world enjoy the advantages of homegrown, clean American energy that is meeting our energy needs and environmental goals here at home and across the globe.”
Production taxes are only one of many taxes the Texas oil and natural gas industry pays. It also pays billions of dollars in property taxes on assets ranging from producing mineral properties to pipelines to refineries and gas stations. The industry also pays billions in state and local sales taxes, millions in state government fees and state franchise taxes, and gross receipts taxes imposed on natural gas utilities and pipelines.
The comptroller reported that receipts from auto dealers, parts stores and home improvement stores saw double-digit growth. Motor vehicle sales and rental tax remittances totaled $605 million, up 5% from July 2021. Motor fuel tax remittances were $324 million, up 3% from July 2021.
Receipts from retail trade and restaurants increased at a moderate pace. Hotel occupancy tax remittances totaled $73 million, up 22% from July 2021; alcoholic beverage tax remittances were $149 million, up 13% from July 2021.
Receipts from general merchandise and online vendors grew modestly.
Sales tax receipts were flat for clothing and apparel stores, home furnishings stores, and sporting goods and hobby stores; receipts from electronics and appliance stores declined.