San Antonio Sales Tax Revenue Falls 4% as Regional Economy Lags

Sales tax collections for San Antonio fell by more than 4% in September compared to the same month last year, according to data from the Texas Comptroller's Office. The state allocated over $38 million to the city for the month. A portion of this decline is attributable to a minor reduction in the local sales tax rate, which moved from 1.250% to 1.25% year over year.

The dip in revenue stands in sharp contrast to neighboring major metros. Austin recorded the highest increase among the state's largest cities, with sales tax revenue up 14% year over year. Dallas saw a rise of more than 10%, while Houston increased by nearly 6%. None of those three cities adjusted their local sales tax rates during the same period.

State Comptroller Don Huffines noted that statewide sales tax collections rose by 13% in September. He described the performance as the first consecutive monthly double-digit increase since the pandemic. Huffines stated that strong collections provide lawmakers with the means to prioritize property tax relief in the next legislative session. Retail sales, the largest sector of the Texas economy, grew by 11% annually.

Not all sectors showed growth. Statewide, restaurant sales tax revenue increased by just over 2%. Conversely, motor vehicle and rental sales tax revenue both declined by 1%. Motor fuel sales tax revenue dropped by 1%, and alcohol sales tax revenue fell by 8%. Hotel occupancy tax revenue statewide saw a 21% decrease, a trend that often signals weakness in the leisure and hospitality industry.

Local economic indicators suggest a similar pattern of slowing momentum. The unemployment rate in San Antonio stood at 4.3% in September, matching the statewide average but exceeding the national rate of 4%. This figure was slightly higher than the 4.2% recorded in September of the previous year. The regional economic development organization greater:SATX did not provide a comment on the September sales tax figures on Monday.

The housing market also showed signs of cooling. Home sales in San Antonio dropped by 2% compared to the previous year. The median price for a home in the area fell by a similar margin to reach $302,000. These figures arrive as residents face higher costs for essentials such as gasoline and groceries.