Texas sales tax collections climb 13.3% in October, led by construction and manufacturing

Texas collected $4.8 billion in net state sales tax revenue in October, up 13.3% from the same month last year, Comptroller Don Huffines reported Monday.

It was the second month in a row of double-digit growth over the prior year. The comptroller's office said that had not happened since the months after the pandemic shutdowns.

Where the growth came from

Businesses accounted for most of the gain. Remittances from construction rose 38% and manufacturing rose 33% from October 2025, with increases spread across subsectors in both. The office said those gains may reflect spending on large projects, including data centers, during September.

Retail, the biggest single sector, rose 11%, with most of the lift coming from online purchases and from stores selling electronics and appliances. Restaurants were up 2.3%, which the office noted is below the inflation rate for meals eaten away from home. Sales tax payments from oil and gas mining dropped nearly 12%.

Most of the money collected in October comes from businesses that file monthly and reflects what they sold in September. Quarterly and annual filers pay on a different schedule.

Other taxes

For the calendar year so far, the state has collected $44.4 billion in net sales tax, 8.4% more than in the same stretch of 2025. Sales tax supplied 59% of all state tax collections in fiscal 2026.

Other October tax totals, compared with a year earlier:

• Oil production: $634 million (56% higher)
• Vehicle sales and rentals: $690 million (1% lower)
• Motor fuel: $332 million (under 1% lower)
• Alcohol: $133 million (8% lower)
• Hotel stays: $51 million (21% lower)
• Natural gas production: $50 million (78% lower)

Total tax revenue for the month was $6.9 billion, up 7.1%. Revenue from all sources was $14.3 billion, down 8.1%, because October 2025 included a one-time $1.75 billion payment tied to tolls, the office said. Without that payment, all-funds revenue rose 3.5%.

Huffines said the collections give lawmakers room in the next legislative session to make property tax relief "a top priority." How to use state revenue, including for property tax cuts, is a recurring debate at the Capitol, and the comptroller's statement is his view as the state's chief revenue officer.

The local share of sales tax, which cities and counties use to help fund their budgets, is sent out separately each month; the comptroller distributed $1.3 billion to local governments in mid-October for September collections.

Sources

State of Texas

State of Texas