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SALES AND USE TAX COLLECTIONS

Sales and use taxes collected by the 122 Houston-area cities that collect them totaled $438.3 million during the first three months of ’25, up 9.5 percent from the $400.1 million collected over the comparable period in ’24. Adjusted for inflation, collections are up 8.4 percent.

These collections, which cover the purchases of both consumers and businesses, are a proxy for broad economic activity in the region. The increase suggests strength in the local economy even after adjusting for inflation. However, the discussion of tariffs during the first months of ‘25 may have led businesses and consumers to frontload their purchases before anticipated price increases or supply chain disruptions. This might have caused a spike in collections that does not reflect real economic strength.  

Among the 21 cities in the metro area that collected $3 million or more in taxes through March of this year, activity is up five percent or more in nine cities, marginally up in nine, and down in three, before adjusting for inflation. These 21 cities accounted for 89.0 percent of all sales tax collections during that time.

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. Data for January through April will be released in June. 

Prepared by The Greater Houston Partnership Research Division

Clara Richardson
Analyst, Research
crichardson@houston.org

Colin Baker
Manager of Economic Research
bakerc@houston.org