Sales tax allocations for August 2026 dropped today, and the headline is a staggering 14.41% year-over-year increase. Trying to pinpoint the reasons for this growth from the publicly available data isn't always easy; the full picture will be clearer when the confidential taxpayer-level data are made available within the next 10 business days. But there's no reason to wait until then to see what we can learn in the meantime. Here are a few highlights:

City sales tax came in 14.41% up statewide

Cities received $921m, $116m more than last year's allocations.

4 out of 5 cities saw growth in August

And with a median growth rate of 12%, this wasn't a small subset bringing up the average.

The increase is not driven by payment timing issues

The gains are overwhelmingly among current collections (87%). Future collections account for 8.4% of the growth, while prior period and audit adjustments largely offset one another.

Remote sales took off

Allocations from the Single Local Tax Rate grew nearly 37% over last year.

Even the big cities grew

Arlington was up 26.5%; Austin 19%; Fort Worth, Frisco, and El Paso 16%; Dallas 13%; and Houston 8%.

The outlier

Round Rock's 283% increase accounted for nearly one-quarter of the statewide gains. Excluding them, statewide growth falls from 14.4% to roughly 11%. That's much more in line with state sales tax collections for July (which also reflects June activity).

The broader Texas economy was strong

The Comptroller's July sales tax report described broad based growth across the economy, with double-digit increases in wholesale trade, construction, retail, and services. The report also noted that oil and natural gas production tax collections rose 36% and 31% respectively. Whether that translated into local sales tax collections, or whether other industries such as technology played a larger role, will become clearer once taxpayer-level data are available.