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(Bloomberg) — Texas’s tax revenue is rising by historic amounts, in part as economic growth and soaring inflation drive up the price of goods.
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The Lone Star state collected $77.2 billion in a category known as all funds tax collections in the fiscal year through August, up 25.6% from the same period a year earlier, according to a release Thursday by state Comptroller Glenn Hegar.
Only five times since 1988 has the increase been in the double digits — ranging from 10% to 13%, said Hegar, who noted that revenue continues to outpace even the state’s most recent forecast.
“Over the last many months, economic growth and inflation have driven higher sales tax collections as demand remains strong and businesses and consumers continue to pay elevated prices for goods,” Hegar said in the release.
Tax collections across US states have climbed on the back of a booming economy in the last year, though some areas, like California, are starting to see drop-offs.
Without a state income tax, Texas relies heavily on sales-tax revenue, which makes up more than half of all tax collections in the state.
Sales taxes tend to spike during periods of high inflation, as the levies are a percentage of the purchase price of certain goods and services. In August, Texas collected $3.77 billion of sales tax revenue, 13% more than August 2021, the release outlined.
“The strong growth in August came from receipts remitted by the oil and gas mining sector, which were up by nearly 80% compared with a year ago,” Hegar said. “Receipts from the construction, manufacturing and wholesale trade sectors showed double-digit growth for the ninth consecutive month, demonstrating continued strong spending by businesses in the state.”
Read More: In Covid Economic Recovery, Idaho Stands Out With Sales Tax Haul
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