(The Center Square) – State sales tax revenue in April totaled $4.09 billion, with receipts from the Texas oil and natural gas industry showing the largest growth. The industry’s remittances saw a 50% gain for the fourth consecutive month.
April sales tax revenue is based on sales made in March and remitted in April. Sales taxes are the largest source of state funding for the state budget, accounting for 56% of all tax collections.
Total receipts last month were 6.7% more than they were in April 2022. Total sales tax revenue for the three months ending in April 2023 was up 8.8% compared to the same period last year, the comptroller’s office said.
“April sales tax revenue growth, moderately in excess of general price inflation, suggests economic expansion continues in spite of higher interest rates and fears of a recession,” Comptroller Glenn Hegar said. “The strongest growth continues to be from sectors primarily driven by business spending.
“Receipts from the oil and gas mining sectors once again showed the strongest growth among all sectors compared with the same month a year ago, with remittances approaching a 50-percent gain for the fourth straight month. Receipts from the construction and manufacturing sectors were up by double digits, while receipts from wholesale trade slowed and dipped below the year-ago level, as building materials prices have come down from the peak reached last year.”
Oil production taxes in April totaled $453 million; natural gas production taxes totaled $203 million.
The Texas oil and natural gas industry’s tax contribution increase is consistent with its ongoing job growth. In April, the industry added more jobs, reaching nearly 200,000 employed statewide for the first time in more than three years.
Since the COVID-low point in September 2020, months of increases in upstream oil and natural gas employment in Texas outnumbered months of decreases by 27 to 4, the Texas Oil & Gas Association notes, with jobs in the industry paying among the highest wages in Texas.
Demand for jobs in the industry is expected to grow as the Texas oil and natural gas industry is expected to keep leading the U.S. in production output.
“Continued growth in employment and production levels for the Texas oil and natural gas industry,” Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association (TIPRO), said, “equates to enhanced energy security for our country and unmatched economic contributions to our state.”
Job growth, and continued production, translates to more taxes paid to state coffers.
In fiscal 2022, the industry paid a record $24.7 billion in state and local taxes and state royalties, the most in Texas history. This represented a 54% increase from its previous record of $16 billion paid in 2019, and more than double what it paid in fiscal 2021, according to a Texas Oil & Gas Association report.
In April, other sectors’ remittances also showed growth, the comptroller’s office noted, including the retail trade sector, electronic shopping, grocery stores, general merchandise, and restaurants.
Motor vehicle sales and rental taxes contributed the most in remittances last month of $507 million; motor fuel taxes totaled $319 million.
Two other major tax categories reported records last month.
Alcoholic beverage tax remittances totaled $163 million, and hotel occupancy tax remittances totaled $83 million. Each reported the highest monthly collections on record.
This article First appeared in the center square