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TX oil production tax revenue down 45.5% from Dec 2019. Could weed legalization help?

Oil prices plummet to record low amid coronavirus pandemic
Posted at 1:13 PM, Jan 04, 2021
and last updated 2021-01-04 14:55:04-05

AUSTIN, TX — Total sales tax revenue for Oct-Dec 2020 was down 5% in Texas when compared to 2019.

Sales tax is the largest source of state funding for the state budget, accounting for 59% of all tax collections.

Texas Comptroller, Glenn Hegar, shared sales tax revenue totaled $2.86 billion in Dec 2020.

With that said, the actual majority of Dec sale numbers, come from sales made in Nov, but are passed onto the agency, in Dec.

“December sales tax collections continued recent trends, with receipts from most major economic sectors significantly down from a year ago,” Hegar said in a statement.

“Retail trade was the principal exception, with the strongest gains coming from online general merchandisers, building materials and home improvement stores, warehouse clubs and supercenters and sporting goods and hobby stores." he added.

Unfortunately, not all industries are striving during these economically challenging times for many.

During this quarter, oil production tax revenue of $197 million, was actually down 45.5% from Dec of 2019; natural gas production tax revenue of $86 million, was also down 25% from Dec 2019 respectively.

The most impacted industry in Texas? The tourism-related sector.

The reported hotel occupancy tax revenue of $26 million, was down a devastatingly 48.5% from Dec 2019.

“Receipts from restaurants, entertainment venues and personal service and tourism-related businesses continue to be depressed. Receipts from oil- and gas-related sectors also were lower year over year as drilling activity remained subdued.” Hegar said.

Other hard hit sectors also included the State's motor fuel tax revenue, $278 million, down 10.6% from Dec 2019.

At the moment, Texas is projected to face a $4.6 billion deficit by Aug 2021, due largely to COVID-19 related job loss & economic fall out.

Seeking new tax revenue, State Representatives like Roland Gutierrez, are heading into the upcoming TX legislative session with proposals such as SB 140; the likes of which, proposes a 10% sale tax that would go towards funding additional border patrol check points, police officer pay security, & local school funding, among other things as well.

If passed, Texas would join Republican lead state like South Dakota & Montana, that both legalized marijuana sales this recent 2020 election season.

S.B. 104 would not pardon or expunge any criminal offenses related to marijuana possession committed before the date of Sep 1, 2021.