NASHVILLE, Tenn. – Tennessee Department of Finance and Administration Commissioner Butch Eley today announced that Tennessee tax revenues exceeded budgeted estimates in October. Overall October revenues were $1.4 billion, which is $238.9 million more than October of last year and $256.2 million more than the budgeted estimate. The growth rate for October was 20.52 percent.
“October’s revenue growth is due primarily to increased sales tax collections, corporate tax receipts, and growth in realty recordation taxes that are reported under privilege taxes,” Eley said. “Sales and use taxes, reflecting September taxable sales activity, continue to indicate growth across all industries with internet sales contributing nearly a third of the month’s sales tax growth. State corporate tax receipts, or franchise and excise taxes, also continued to surpass estimates despite October being a month when corporate tax filers may request a refund from quarterly estimated payments made during the last tax year, if they filed an extension. All other tax revenue combined exceeded estimates.
“Despite the strong start to the fiscal year we expect future revenue growth to be lower as collections from the marketplace facilitator law only commenced in October 2020. This means future tax revenue reports will show more moderate comparison figures for sales tax receipts. As such, we will continue to monitor economic activity and revenue trends to ensure fiscal stability.”
On an accrual basis, October is the third month in the 2021-2022 fiscal year.
General fund revenues for October were $234.7 million more than the budgeted estimate, and the four other funds that share in state tax revenues were $21.5 million more than the budgeted estimates.
Sales tax revenues were $176.5 million more than the estimate for October. The October growth rate was 19.96 percent. Year-to-date revenues are 20.70 percent more than this time last year.
Franchise and excise taxes combined were $44.7 million more than the October budgeted estimate of $53.5 million. The October growth rate was 77.97 percent, and the year-to-date corporate tax growth rate is 38.47 percent.
Gasoline and motor fuel revenues increased by 1.92 percent and were $2.2 million more than the budgeted estimate of $107.6 million.
Motor Vehicle Registration revenue receipts increased by 10.40 percent from this same time last year and were $5.2 million more than the October estimate.
Tobacco tax revenues for the month were $2.5 million more than the budgeted estimate of $18.3 million. For three months, revenues are $0.6 million less than the budgeted estimate.
Privilege tax revenues were $18.5 million more than the budgeted estimate of $37.4 million, and on a year-to-date basis have exceed estimates by $33.9 million.
Business tax revenues were $1 million more than the budgeted estimate. Year-to-date, business tax revenues are $2.3 million less than the budgeted estimate.
Mixed drink, or liquor-by-the-drink, taxes were $3 million more than the October estimate, and on a year-to-date basis, revenues are $6.6 million more than the estimate.
Hall income taxes were $1.2 million more than the October estimate. For three months, income tax revenue growth is negative 40.19 percent less than last year.
All other tax revenues were greater than estimates by a net of $1.4 million.
Year-to-date revenues for three months were $902.3 million more than the budgeted estimate. The general fund exceeded estimates by $845.4 million and the four other funds that share in state tax revenues exceeded estimates by $56.9 million.
The budgeted revenue estimates for 2021-2022 are based on the State Funding Board’s consensus recommendation of November 24, 2020 and adopted by the first session of the 112th General Assembly in April 2021. Also incorporated in the estimates are any changes in revenue enacted during the 2021 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.