Another Record Month for the State Sales Tax

January 31, 2014
By Paul K. Emerson, TAC State Financial Analyst
Legislative News

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This past December was another successful month for state sales tax collections. In all, the state sales tax collections have increased now for 45 consecutive months (year-over-year). December’s receipts were $2.25 billion, up 3.9 percent compared to the same period last year. 

The state sales tax (6.25 percent), the biggest contributor to general revenue, generated $26.1 billion for 2013, which is roughly $1.24 billion (or 4.9 percent) more than in 2012, based on the regular calendar year, not the state’s fiscal year.

The illustration in the chart below shows how the state sales tax has performed over the past four calendar years. It’s interesting to note how the various highs and lows seem to occur right around the same time over a forty-eight month period.

Several months stand out the most—May, August and especially November, leading-up to the holidays in 2012 and 2013, respectively. The relatively high peak occurring in August is also noticeable over a four year period which may be due to the start of a new school year and the tax-free weekend.  

Another interesting point is the total amount of sales tax collected in calendar year 2010 compared to calendar year 2013 collections. The state collected an additional $6.1 billion in sale taxes in 2013 compared to three years earlier in 2010 – which the Comptroller’s Office has attributed to strong business spending in the oil and natural gas and manufacturing sectors, followed by retail sales activity.