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Sales tax collections down, as expected

Monday, May 4, 2020 by Jo Clifton

Texas Comptroller Glenn Hegar announced the inevitable bad news about sales taxes on Friday, with revenues falling as a result of business closures related to the Covid-19 pandemic. The April sales tax report shows revenues fell 9.3 percent, with most of the revenues coming from sales made in March. Hegar is expected to share even worse news Wednesday, when the rest of March’s sales are announced. The news on oil prices was also bad, as oil and gas production companies “slashed capital spending in response to the crash” in the price of oil, Hegar noted. Austin collected more than $18.4 million for the current period, up from more than $17.8 million in 2019. Expect the next round of payments to be significantly lower, however, because of the cancellation of SXSW and other activities. Overall, motor vehicle sales and rental taxes were down 45 percent this year compared to April 2019, the largest monthly drop in data going back to 1983. The Hotel Occupancy Tax, which Austin collects for a number of tourism-related activities, was $24 million, down 63 percent over last year. Alcoholic beverage tax collections, specifically related to mixed drinks, were down 55 percent because of the closure of bars and restaurants. However, excise taxes on beer went up 16 percent over last year, while excise taxes on wine were up 9 percent over 2019. So just as you thought, people have not stopped drinking just because the bars are closed.

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