NASHVILLE, Tenn. – Department of Finance and Administration Commissioner Larry Martin today announced that Tennessee tax revenue fell short of budgeted estimates in March. March sales tax revenues reflect retail activity occurring in February, and overall March revenues were $993.6 million, which is $100.9 million less than we collected in March of 2016 and $70.1 million less than the budgeted estimate for the month.
“March sales tax revenues recorded negative growth and were also below our budgeted expectations,” Martin said. “This is due in part to having one less day of retail activity this February compared to February 2016 and also growing over an extraordinarily high base from last year. In addition, the Department of Revenue implemented a new tax administration system this month and extended the sales tax filing deadline. The April report should capture any March outstanding liability taxpayers owe.
“Franchise and Excise tax recorded negative growth for March and were also below the monthly budgeted estimate. All other revenues combined marginally exceeded the March estimate.”
On an accrual basis, March is the eighth month in the 2016-2017 fiscal year.
General fund revenues were less than the budgeted estimates in the amount of $71.5 million while the four other funds that share in state tax revenues were $1.4 million more than the estimates.
Sales taxes were $48.2 million less than the estimate for March and were 6.26% less than March 2016. For eight months revenues are $170.6 million higher than estimated. The year-to-date growth rate for eight months was 2.83%.
Franchise and excise taxes combined were $20.8 million less than the budgeted estimate in March, and the growth rate was negative 20.23%. For eight months revenues are $246.2 million more than the estimate and the year-to-date growth rate is 13.01%. However, adjusting for one-time payments received in the current year the underlying growth rate is negative 1.84%.
Gasoline and motor fuel revenues for March increased by 4.55% compared to March 2016 and were $5.1 million more than the budgeted estimate of $61.2 million. For eight months revenues have exceeded estimates by $31.6 million.
Tobacco taxes were $5.1 million less than the March budgeted estimate of $19.8 million. For eight months they are $2.0 million less than the year-to-date budgeted estimate.
Inheritance and estate taxes were $0.7 million less than the March estimate. On a year-to-date basis revenues for eight months are $3.3 million more than the budgeted estimate.
Privilege taxes were $2.2 million more than the March estimate, and on a year-to-date basis, August through March, revenues are $6.3 million more than the estimate.
Business taxes were $0.3 million less than the March estimate. For eight months revenues are $7.7 million more than the budgeted estimate.
Hall income tax revenues for the month were $2.0 million less than the budgeted estimate.
All other taxes were below estimates by a net of $0.3 million.
Year-to-date revenues for eight months were $475.5 million more than the budgeted estimate. The growth rate for eight months was 4.00%. The general fund recorded $419.8 million above budgeted estimates and the four other funds $55.7 million.
The budgeted revenue estimates for 2016-2017 are based on the State Funding Board’s consensus recommendation of November 23, 2015 and adopted by the second session of the 109th General Assembly in April 2016. Also incorporated in the estimates are any changes in revenue enacted during the 2016 session of the General Assembly. These estimates are available on the state’s website at http://www.tn.gov/finance/article/fa-budget-rev.