Texas Sales Tax Revenue Jumped 13% in October to $4.8 Billion. Construction and Manufacturing Led the Way
Texas collected $4.8 billion in state sales tax in October, the second straight month of double-digit growth. Business spending led, restaurants lagged and oil and gas fell.
Texans heading to the polls Tuesday will pick the official who keeps the state's books. The day before, that office reported the state's cash register is ringing louder than it has in years.
Net state sales tax revenue totaled $4.8 billion in October, up 13.3% from October 2025, the Texas Comptroller's office reported Monday.
Business spending drove the gains
The biggest increases came from sectors driven mainly by business spending. Collections from construction were up 38%, and manufacturing was up 33%. The comptroller's office said the gains were spread across both industries and may reflect September investment in large projects, including data centers.
Retail trade, the largest sector, rose 11%, led mainly by electronics and appliance stores and online shopping. The services sector was also up significantly.
Not every part of the economy did as well. Sales tax from oil and gas mining fell nearly 12%. Restaurant receipts rose 2.3%, which the office noted is below the inflation rate for food away from home.
What the numbers mean
Monthly figures can mislead if you read them wrong. Most of the money collected in October comes from businesses that file monthly and reflects their September sales. Quarterly and annual filers pay on a different schedule. Net revenue is what remains after refunds, overpayment credits and prepayment adjustments.
The broader picture is steady. Calendar year-to-date, net state sales tax revenue was $44.4 billion, up 8.4% from the same period last year. Sales tax is the largest source of state tax revenue, accounting for 59% of all tax collections in fiscal 2026.
Total All Funds revenue was $14.3 billion in October, down 8.1% from a year earlier. The office said that drop reflects a one-time $1.75 billion toll-related payment received in October 2025. Without it, All Funds revenue was up 3.5%. All Funds tax revenue for the month was $6.9 billion, up 7.1%.
Other taxes
Results were mixed for other major taxes in October compared with a year earlier:
Oil production tax: $634 million, up 56%
Motor vehicle sales and rental taxes: $690 million, down 1%
Motor fuel taxes: $332 million, down less than 1%
Alcoholic beverage taxes: $133 million, down 8%
Hotel occupancy tax: $51 million, down 21%
Natural gas production tax: $50 million, down 78%
Property tax relief and the race for comptroller
"These healthy collections provide lawmakers with an opportunity during the next legislative session to continue making property tax relief a top priority and help Texans keep more of their hard-earned money," Comptroller Don Huffines said in the release.
Huffines is also on Tuesday's ballot. Gov. Greg Abbott appointed him to the post after acting Comptroller Kelly Hancock stepped down following his primary loss, according to the Texas Tribune's guide to the race. The Republican faces Democratic state Sen. Sarah Eckhardt, who represents Travis County and is a former Travis County judge, along with Libertarian V. Alonzo Echavarria-Garza and Green Party candidate Shehla Faizi.
The comptroller's revenue estimate sets the limits for the Legislature's budget every two years, and the Tribune notes that years of surpluses have paid for property tax cuts, teacher pay raises and water projects. Huffines has promised to root out waste and return the savings to taxpayers as property tax relief, and he has launched a whistleblower portal for fraud tips. Eckhardt has vowed to stop no-bid contracts for wealthy donors and to audit the new school voucher program.
That program is a big part of the choice in front of voters, as we reported in our look at the comptroller race and school choice.
Whoever wins will take over a strong revenue stream, and the hard decisions about spending it will fall to the Legislature.
