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Monthly Update: Sales Tax

May '22, Latest Data
Published on 7/28/22

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SALES AND USE TAX COLLECTIONS

Sales and use tax collections year-to-date are up across the state. Collections are outpacing inflation. Most of the cities in metro Houston that collect the tax have seen substantial increases YTD. The jump has come from both consumer and business purchases, suggesting that the state and local economies continue to expand. 

Glenn Hegar, Texas Comptroller of Public Accounts, notes that collections have accelerated in the manufacturing, construction, and mining and logging (i.e., energy) sectors. Also, collections related to restaurants and services have picked up. However, collections from furniture, sporting goods, and hobby stores have begun to soften. May collections continue to exceed pre-COVID numbers, but growth has slowed somewhat over the past three months.

 
LOCAL COLLECTIONS

Sales tax collections in the 12 most populous Houston-area cities[1] YTD totaled $484.2 million, up from $425.1 million in the comparable period in ’21. 

Collections in the region’s 12 most populous cities for May totaled $99.63 million, up 11.07 percent from $89.70 million in May ’21.

 
ABOUT THE SALES AND USE TAX

Texas levies a 6.25 percent state sales and use tax on all retail sales, leases and rentals of most goods, as well as taxable services. Local taxing jurisdictions may also impose up to a 2.0 percent sales and use tax for a maximum overall rate of 8.25 percent. The City of Houston has a 1.0 percent rate, and the Metropolitan Transit Authority of Harris County has a 1.0 percent rate, leading to an overall rate of 8.25 percent for the city. Cities with less than a 2.0 percent rate, like Houston, may have additional sales and use tax rates that may be related to transit, crime control, emergency services and more. For the sales and use tax rates for the most populous 12 cities in the Houston region, visit https://www.houston.org/houston-data/sales-and-use-tax-rates

The Texas Comptroller of Public Accounts releases allocated payments from the sales and use tax monthly. There is a two-month delay between when the tax is collected and when it is allocated. March sales data will be available in May. 

 

[1] The 12 most populous cities in the region are: Houston, Pasadena, Pearland, League City, Sugar Land, Conroe, Baytown, Missouri City, Galveston, Texas City, Friendswood, and La Porte. As a group, they represent 80.0 percent of all sales tax collections in the region. The other 102 smaller cities account for the remaining 20.0 percent. 

 

Prepared by Greater Houston Partnership Research Division

Patrick Jankowski
Senior Vice President, Research
713-844-3616
pjankowski@houston.org

Key Economic Indicators Economy
11.1%

Houston-area sales tax collections increased 11.1% from May '21

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