Higher retail sales, inflation creates best-ever March sales tax allocation for Gonzales

Higher retail sales year-over-year as well as inflation have resulted in the best-ever March sales tax allocation for the city of Gonzales — more than $27,000 higher than the previous record set in 2023, according to figures released by Texas Comptroller Glenn Hegar’s office.

Sales tax allocations for all four cities in the county combined were up more than $66,000 more than what they were in March 2024.

Hegar announced he will send cities, counties, transit systems and special purpose districts $1.1 billion in local sales tax allocations for March, 10.2 percent more than in March 2024. These allocations are based on sales made in January by businesses that report tax monthly.

Combined sales tax allocations for the month of March 2025 for all four municipalities were $313,822.16 — up $66,34.37, or 27 percent, above the $247,087.79 received in March 2024. For the year, municipalities have gotten back $992,192.25, up $125,66230, or 14.5 percent, above the $866,529.95 received through this point last year.

Three municipalities in Gonzales County — Gonzales, Nixon and Smiley — saw increases in their sales tax allocation from a year ago, while Waelder got back just slightly less than what it received in March 2024.

Texas imposes a 6.25 percent state sales and use tax on all retail sales, leases and rentals of most goods, as well as taxable services. Cities can charge up to 1.5 percent and counties can charge 0.5 percent for a total of 8.25 percent.

Retail sales nationwide are down by 1.16 from December, but up 4.01 percent from a year ago. In January 2025, prices had increased by three percent compared to January 2024 according to the 12-month percentage change in the consumer price index — the monthly inflation rate for goods and services in the United States. Inflation has gone up every month since September 2024, when the CPI was 2.4 percent — its lowest rate in 2024.

Economists are anticipating household spending — especially among lower-to-median-income families — could be curtailed in coming months due to uncertainty over U.S. economic policy, inflation possibly overtaking wage growth and fears about a possible recession.

Increases in the overall prices of retail goods and services can lead to an increase in sales tax receipts, even if sales are stagnant, since they are based on a percentage of the price and are not themselves a flat fee.

Gonzales saw a whopping 32 percent increase, or $66,734.37 more, in sales tax allocations for March 2025 above the March 2024 allocation. The largest city in the county, which generates the lion’s share of sales tax revenue, received $271,760.76, compared to $254,840.06 in March 2024.

It is $27,252.04 above the $244,508.72 received in March 2023, which was the previous record for March.

For the year, the city has received $847,602.42, up 15.78 percent or $115,557.22 more than the $732,045.20 Gonzales took in during the first three months of 2024.

Sales tax receipts also were up for Nixon, which received $29,650.79, up $655.86 or 2.26 percent more than the $28,994.93 received in March 2024. For the year, the city has taken in $104,424.09, equal to 10.87 percent or $10,239.17 more than the $94,184.92 Nixon took in during the first three months of 2024.

Waelder received a total of $9,232.13, a decrease of $287.34, or 3.01percent, less than the $9,519.47 received in March 2024. For the year, the city has taken in $30,543, which is 1.54 percent or $466 more than the $30,077 the city had taken in up to this point last year.

Finally, Smiley’s sales tax receipts were $3,178.48, up $478.08 or 17.70 percent, above the $2,700.40 received in March 2024. For the year, the city has received $9,622.74, which is 5.87 percent or $600.09 less than the $10,222.83 received through this point last year.

Three cities in Gonzales County — Gonzales, Nixon and Waelder — collect a 1.5 percent sales tax rate, while Smiley collects a 1 percent sales tax.

Gonzales County itself also receives a 0.5 percent sales and use tax and for the month of March 2025, the county received $556,613.76, which is 156.23 percent or $339,384.37 more than the $217,229.39 received in March 2024 and $278,595.55, or 100.2 percent more than the $278,018.21 received last month.

For the year, the county has received $1,008,535.77, which is 2.39 percent or $23,623.35 more than the $984,912.42 the county took in during the first three months of 2024.