Sales tax revenue for the city of New Braunfels has gone through a bit of a roller coaster ride, from a period of economic resilience during the beginning of the COVID-19 pandemic to other factors this year causing a fall in revenue, city officials said.

For instance, sales tax figures for the state of Texas overall in August were up 13% from 2021’s August collections, according to the Texas Comptroller’s Office.

“Receipts from nearly all segments of the retail sector came in higher than a year ago, with online shopping and sales at grocery stores leading the way. Receipts from restaurants were also up from last year,” Texas Comptroller Glen Hegar said in a statement Nov. 1.

Different trends were experienced locally, however.

Jared Werner, assistant city manager for New Braunfels, said sales tax collection was down for New Braunfels by -0.8% for August compared to August 2021. One large reason was a required tax code change to what was the largest source of sales tax in the city.




HD Supply, a national distributor of office; heating, ventilation and air conditioning; appliance; and other commercial supplies, no longer uses its New Braunfels office as the basis of where its sales take place in Texas, meaning those tax dollars are allocated from each of its regional warehouses instead.

“There’s kind of a hybrid approach to how local sales taxes are sorted, either at the place of business or at the point of delivery, and up until February 2022, the way that their business model operated, it required them to source all of their Texas sales to their New Braunfels headquarters; that’s where the orders were being received,” Werner said.


Now they are required to source those sales differently, either to the point of destination or even the point of where the distribution center is located. Either way, those tax dollars no longer enter the city’s coffers.

Werner added that the New Braunfels office of HD Supply still has the same number of employees and is still doing the same job, but the sales it makes are no longer reflected on a New Braunfels-based ledger.




Sales trends overall in New Braunfels reflect almost an inverse of the statewide trend since COVID-19. Revenue for the city did not begin to drop until July 2020, then quickly began to rebound, according to data from the city. Revenue from spring 2021—received over the course of that summer, saw double-digit growth beginning with March sales taxes up until March 2022, with a high of 43.3% year-over-year growth for March 2021 revenue.

Hotel occupancy taxes—another source of city revenue—showed significant growth in 2022, almost doubling 2020 levels, Werner said.

Total hotel taxes paid were around $4.8 million in 2022, $4 million in 2021 and $2.6 million in 2020, he said, adding that $4.8 million is an all-time high for hotel taxes in New Braunfels.

Pent-up demand from COVID-19 lockdowns, higher room rates at hotels and sustained growth in short-term rentals coming on the market contributed to the growth, Werner said.




“We are starting to see [hotel] taxes plateau. In September, our numbers were actually slightly down compared to September 2021. So as we transition into [FY 2022-23], we’re starting to keep a close eye on taxes to see whether or not the demand and the cost per room per night have plateaued.”