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SALES AND USE TAX COLLECTIONS

Sales and use tax collections in the 121 Houston-area cities that collect the tax totaled $955.7 million during the first seven months of ’24, up 1.2 percent from the $944.0 million collected over the comparable period in ’23. Adjusted for inflation, however, collections are down 1.6 percent.

Collections are a proxy for economic activity in the region. Both businesses and consumers pay sales taxes on their purchases, and the pace of collections tends to track the business cycle. The recent drop in collections (after adjusting for inflation) suggests weakness in the local economy.

Among the 24 cities in the metro area that collected $500,000 or more in taxes through July of this year, activity is up five percent or more in 11 cities, flat in six, and down in seven before adjusting for inflation. These 24 cities accounted for 89.7 percent of all sales tax collections in the region July YTD.

The Texas Comptroller of Public Accounts releases allocated payments from the sales and use tax monthly. There is a two-month delay between when the tax is collected and when it is allocated. Data for January through August will be released in October.

Prepared by Greater Houston Partnership Research Division

Patrick Jankowski
Chief Economist
Senior Vice President, Research
pjankowski@und-ich.com

Clara Richardson
Research Analyst
crichardson@und-ich.com