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Retail Spending Still Strong, but Rest of Texas Economy Hurting

With the exception of retail sales, all major economic sectors of the Texas economy continue to be impacted by the ongoing pandemic, according to the latest report from Texas Comptroller Glenn Hegar.

Overall, state sales tax revenue totaled $2.72 billion in October, a 3.5% decline from October 2019. The steepest declines were in the oil and gas industry, which saw a 75% decrease in drilling activity from a year ago. 

Receipts from retail sales continue to increase as Texans buy building materials, home furnishings, sporting goods and alcohol for off-premise consumption. 

Spending at bars and entertainment venues has not turned around.

“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,” Hegar reported. 

Also, 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.

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

Sales tax is the largest source of state funding for the state budget, accounting for 59% of all tax collections. The effects of the COVID-19-related economic slowdown were also evident in motor vehicles sales and rental taxes, motor fuel taxes, oil production tax, natural gas production tax, hotel occupancy tax and alcoholic beverage taxes, all of which suffered significant declines from October 2019. 

Staff
Staff
Written by RA News staff.

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