Texas Trends in Sales Tax and Economic Drivers

This report provides an analysis of Texas's economic conditions and sales tax trends as of April 2026. It outlines the moderation in Texas's economy, noting a slowdown in growth during the fourth quarter of 2025, attributed to softer employment gains and cautious business sentiment. The Texas Comptroller reported a 3.2% increase in state sales tax revenue for December 2025, totaling $4.3 billion, with allocations to cities and transit systems also reflecting growth. The report details mixed energy conditions, with oil prices declining while natural gas prices increased. The service sector showed stabilization after previous weaknesses, with modest employment growth and cautious business outlooks. Retail trade conditions remained soft, with a negative retail sales index indicating more declines than increases in sales. Nationally, U.S. GDP growth slowed to 0.5% in 4Q2025, influenced by consumer spending and investment dynamics. The report concludes with insights into Texas's labor market, which remains resilient despite a slight increase in unemployment rates.