NASHVILLE, Tenn. – Tennessee Department of Finance and Administration Commissioner Stuart McWhorter today announced that overall January state tax revenues exceeded budgeted estimates. Revenues for January totaled $1.55 billion, which is $129.4 million more than budgeted and 11.86 percent greater than revenues received in January 2019.
“January sales tax revenues, reflecting consumer spending that occurred during December, remain strong and represent 34 consecutive months of positive growth,” McWhorter said. “The second quarter adjusted growth rate from sales activity was 6.14 percent compared to last year, driven by solid performances in retail and manufacturing sales. Corporate tax revenues also continue to outperform budgeted estimates, exceeding expectations for the month by 23.8 percent.
“The economic growth we have experienced in these first six months puts the state in a good position to fund the current and upcoming fiscal years. The year-to-date total tax collections are currently outpacing estimates by 6.48 percent, which signals a promising finish for the 2020 fiscal year. Nevertheless, we will continue to closely monitor our monthly receipts, being mindful that economic conditions may change.”
On an accrual basis, January is the sixth month in the 2019-2020 fiscal year.
General fund revenues were greater than the budgeted estimates in the amount of $105.7 million while the four other funds that share in state tax revenues were $23.7 million more than the estimates.
Sales tax revenues were $72.0 million more than the estimate for January and the growth rate was 11.11 percent. However, after adjusting for a very large one-time payment, the underlying growth rate from sales tax compared to last year was 9.02 percent. For six months, revenues are $195.5 million higher than estimated. The year-to-date growth rate for six months is 6.64 percent.
Franchise and excise tax revenues were $46.3 million more than the January budgeted estimate. The growth rate compared to January 2019 was 20.09 percent. Year-to-date franchise and excise tax revenues for the first six months of this year are 18.82 percent and $198.1 million more than estimated.
Gasoline and motor fuel revenues for January increased by 3.46 percent compared to January 2019 and were $1.4 million less than the budgeted estimate of $105.5 million. For six months, revenues are more than estimates by $29.7 million.
Motor vehicle registration revenues were $2.9 million more than the January estimate, and on a year-to-date basis exceed estimates by $8.0 million
Tobacco tax revenues were $0.2 million more than the budgeted estimate of $19.3 million, and for six months they are $2.9 million less than the budgeted estimate.
Privilege tax revenues were $7.3 million more than the January estimate, and on a year-to-date basis, August through January, revenues are $28.8 million more than the estimate.
Business tax revenues were $0.7 million more than the January estimate. For six months revenues are $7.4 million more than the budgeted estimate.
Hall income tax revenues were $0.8 million less than the budgeted estimate.
All other taxes exceeded estimates by a net of $2.2 million.
Year-to-date revenues for six months were $480.5 million more than the budgeted estimate. The general fund recorded $398 million in revenues more than estimates, and the four other funds totaled $82.5 million more than year-to-date estimates.
The budgeted revenue estimates for 2019-2020 are based on the State Funding Board’s consensus recommendation of November 26, 2018 and adopted by the second session of the 111th General Assembly in April 2019. Also incorporated in the estimates are any changes in revenue enacted during the 2019 session of the General Assembly. These estimates are available on the state’s website at https://www.tn.gov/content/tn/finance/fa/fa-budget-information/fa-budget-rev.html.