NASHVILLE, Tenn. – Strong consumer spending in December pushed Tennessee tax revenues above budgeted estimates for January. Finance and Administration Commissioner Larry Martin today announced that overall January revenues were $1.3 billion, which is $45.6 million more than the state budgeted.
“January sales taxes, which included the holiday buying season, posted the largest monthly growth rate so far this fiscal year, and in fact, it’s been our strongest second quarter growth since 2006,” Martin said. “Strong consumer spending, a continued decline in gasoline prices and an overall improving economy contributed to the sales tax growth in January.
“Corporate tax revenues recorded negative growth for the month, but we had a significant and unexpected one-time payment in January of last year that accounts for the difference.”
On an accrual basis, January is the sixth month in the 2015-2016 fiscal year.
General fund revenues were more than the budgeted estimates in the amount of $51.9 million while the four other funds that share in state tax revenues were $6.3 million less than the estimates.
Sales taxes were $58.3 million more than the estimate for January and were 8.59% more than January 2015. For six months revenues are $217.6 million higher than estimated. The year-to-date growth rate for six months was 7.44%.
Franchise and excise taxes combined were $17.0 million less than the budgeted estimate in January and the growth rate over January 2015 was negative 40.81%. However, adjusting for last January’s one-time payment, the underlying growth rate in F&E taxes was 10.43%. For six months revenues are $140.9 million more than the estimate.
Gasoline and motor fuel revenues for January decreased by 4.21% compared to January 2015 and were $3.5 million less than the budgeted estimate of $74.0 million. For six months revenues have exceeded estimates by $14.7 million.
Tobacco taxes were $4.9 million more than the budgeted estimate of $16.8 million, and for six months they are $9.1 million more than the budgeted estimate.
Inheritance and estate taxes fell short of estimates by $0.4 million for the month. Year-to-date revenues for six months are $8.1 million more than the budgeted estimate.
Privilege taxes were $2.4 million more than the January estimate, and on a year-to-date basis, August through January, revenues are $12.6 million more than the estimate.
Business taxes were $1.0 million more than the January estimate. For six months revenues are $0.6 million more than the budgeted estimate.
All other taxes were below estimates by a net of $0.1 million.
Year-to-date revenues for six months were $419.0 million more than the budgeted estimate. The general fund recorded $395.3 million above budgeted estimates and the four other funds $23.7 million.
The budgeted revenue estimates for 2015-2016 are based on the State Funding Board’s consensus recommendation of December 16th, 2014 and adopted by the first session of the 109th General Assembly in April 2015. Also incorporated in the estimates are any changes in revenue enacted during the 2015 session of the General Assembly. These estimates are available on the state’s website at http://www.tn.gov/finance/article/fa-budget-rev.