Texas collected more sales tax in September 2010 than it did in the same month last year. In light of the current economic situation, this is very good news. In fact, the increase of 6.8% was substantially better than recent increases that have ranged from just a little above 0% to 2%. In September, Texas collected $1.57 billion in sales tax revenue.
The taxes collected in September are based in sales completed in August, so there is a slight lag in the reporting. Septembers sales will be reflected in October’s sales tax collections. Therefore, it is good to look at trends as a better indication of our current situation and the trend that has developed is definitely positive.
More sales tax collections means more government funding. Local governements, for example, will see a 6% increase in allocations from a year ago. Texas cities will see a boost of 6.1% from the same month last year. Special purpose taxing districts gain the most with an increase of 12.2% from last year and transit systems will see a 4.5% increase.
Increases in sales tax revenues are a good indication of local consumer confidence and behaviors. While nationally we still seem to be experienced slow spending results, this reported increase in Texas sales tax collections is a very positive signal that our state and local economies are fairing better than most.