Texas sees strong economic momentum as sales tax revenue jumps 10 percent compared to last year reaching $4 billion

Austin, Texas – Texas reported a strong surge in tax collections for March, bringing in $4 billion in state sales tax revenue, a notable 10 percent increase compared to the same month last year. The latest figures point to continued economic momentum across the state, with growth fueled by both business activity and steady consumer demand.

Acting Comptroller Kelly Hancock highlighted the results as a sign of a healthy and expanding economy. The bulk of March’s collections reflects sales made in February, and the numbers represent the fastest pace of growth seen since early 2023. Officials say the increase is not only broad-based but also exceeds inflation, suggesting real expansion rather than price-driven gains.

Business and retail sectors drive growth

A major portion of the increase came from sectors tied to business spending. Wholesale trade, construction, and mining all posted double-digit gains when compared to March 2025, signaling strong activity in industries tied to development and supply chains. Manufacturing also contributed to the growth, rising by about 7 percent.

Retail trade, which remains the largest source of sales tax revenue in Texas, saw an increase of more than 9 percent. This marks its strongest performance since the surge that followed the pandemic recovery in 2022. The steady rise in retail activity reflects consistent spending by consumers across multiple categories.

Online shopping played a major role in boosting the numbers, with electronic retail receipts jumping more than 16 percent year over year. Traditional retail areas also showed solid growth, including clothing, health-related products, and general merchandise. At the same time, restaurant spending rose by more than 7 percent, showing that people are continuing to spend on dining despite broader economic pressures.

Sales tax continues to be the backbone of Texas’ revenue system, making up about 58 percent of all state tax collections. Over the past three months, total sales tax revenue has increased by 6.9 percent compared to the same period last year, further reinforcing the trend of steady growth.

While sales tax collections showed strength, other areas presented a mixed picture. Motor vehicle taxes experienced a sharp decline, and revenues from oil and natural gas taxes also dropped. These decreases highlight the ongoing uncertainty within the energy sector, which remains sensitive to market fluctuations.

Overall, the March numbers paint a picture of a resilient Texas economy, with strong consumer activity and business investment helping to offset challenges in other revenue streams.