# Texas local sales tax grew 14% in August 2026, let's unpack it

**Date:** 2026-08-12
**Topics:** sales tax
**URL:** https://zactax.com/blog/2026/08/unpacking-the-14-sales-tax-increase-in-august-2026

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An early recap of the large gains in the Texas August 2026 sales tax allocations

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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](https://comptroller.texas.gov/about/media-center/news/20260803-state-sales-tax-revenue-totaled-46-billion-in-july-1785782029853) (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.