State sales tax revenue in Texas reached $4 billion in February, marking a 3.8 percent increase compared to the same month last year, according to Acting Texas Comptroller Kelly Hancock. Most of the revenue reported for February is based on January sales.
“Texas continues to show steady economic momentum,” Hancock said. “Sales tax remains the backbone of our state budget, and these numbers reflect a resilient Texas economy that continues to outpace inflation and support responsible, conservative budgeting.”
Business-driven sectors saw mixed results. Collections from construction and manufacturing were slightly lower than those recorded in February 2025. The wholesale trade sector, however, experienced an increase of more than 8 percent over last year. Mining sector remittances declined significantly, partly due to higher refund activity.
Consumer-focused sectors performed better overall. Revenue from services increased by nearly 10 percent, while retail trade—the largest sector—rose by more than 4 percent compared with February of the previous year.
Within retail trade, most subsectors grew robustly; electronics and appliance stores as well as sporting goods and hobby stores saw remittances climb by over 10 percent from a year ago. In contrast, home improvement stores and furniture retailers reported declines.
Restaurant receipts increased by more than 4 percent over last year, slightly surpassing the inflation rate for food away from home.
For the three months ending in February 2026, total sales tax revenue was up 5.6 percent compared with the same period a year earlier. Sales tax remains the primary source of state funding in Texas, making up 58 percent of all tax collections.
Other major taxes collected by Texas included $641 million from motor vehicle sales and rentals (down 1 percent), $310 million from motor fuel taxes (up less than 1 percent), $386 million from oil production tax (down 21 percent), $181 million from natural gas production tax (down 18 percent), $51 million from hotel occupancy tax (down 11 percent), and $126 million from alcoholic beverage taxes (down 2 percent).
Further details on monthly collections are available through the Comptroller’s Monthly State Revenue Watch at https://comptroller.texas.gov/transparency/revenue/watch/. A comprehensive history of state tax policy developments since 1972 can be found in the updated Sources of Revenue publication at https://comptroller.texas.gov/transparency/revenue/sources.php.
