(The Center Square) – Individuals and businesses in Texas continue to pay a record amount of sales taxes.

January sales tax revenue remitted to the state in February totaled $3.68 billion, state Comptroller Glenn Hegar says, 14.2 percent higher than remittances received in February 2022, led by taxes remitted from the oil and natural gas industry.

Total sales tax revenue for the three months ending in February 2023 was up 10.2 percent compared with the same period a year ago, the comptroller’s office said. Sales taxes are the largest source of state funding for the state budget, accounting for 56 percent of all tax collections.

“Propelled by continued strong business spending and a surprising post-holiday surge in consumer spending, growth in February sales tax receipts significantly outpaced inflation, which is still hovering over 6 percent,” Hegar said Wednesday. “Robust increases in receipts from all major sectors suggest economic activity in the state is not yet slowing significantly despite high interest rates and fears of recession.

“As has been the case in recent months, receipts from sectors driven primarily by business spending showed the greatest rates of growth, with receipts from the oil and gas mining, manufacturing and construction sectors coming in strongly above February 2022 totals,” he added.

Oil production taxes paid in January and remitted in February totaled $492 million, up 2 percent from February 2022. Natural gas production taxes paid totaled $305 million, down 5 percent from last February.

The industry paid a record $24.7 billion in state and local taxes and state royalties in fiscal 2022, by far the highest total in Texas history. Taxes the industry paid in fiscal 2022 were a 54 percent increase from a previous record of $16 billion it paid in 2019, and more than double what it paid in fiscal 2021, according to a Texas Oil & Gas Association report.

Production taxes grew by $5.8 billion, a 116 percent increase; royalties paid totaled $2.2 billion, a 102 percent increase, over the year. In fiscal 2022, oil and natural gas production taxes exceeded $10 billion for the first time in Texas history.

Remittances received in February from motor vehicle sales and rental taxes totaled $542 million, up 14 percent from last February; motor fuel taxes totaled $304 million, up 1 percent from last February.

Hotel occupancy taxes totaled $42 million and alcoholic beverage taxes totaled $130 million, up 2 percent and 13 percent, respectively, from February 2022.

Notably, remittances from the retail trade sector, “the sector responsible for the largest portion of state sales tax,” Hegar said, “grew much faster than the rate of inflation for consumer goods.” Those in this sector with the fastest growth in tax receipts were general merchandise and clothing stores, according to Hegar’s report.

Receipts from the services sector were also up by double digits, he said, led by receipts for live entertainment venues. Receipts from restaurants were also up double digits compared to last February, he said, “significantly outpacing the rate of inflation for food away from home.”