NASHVILLE – Department of Finance and Administration Commissioner Jim Bryson today announced that Tennessee tax revenues exceeded budgeted estimates in March. Overall March revenues totaled $1.6 billion, which is $65.8 million, or 4.26 percent more than the state received in March of 2022 and $174.5 million more than the budgeted estimate for the month.
“March sales tax receipts and corporate tax revenues outperformed budgeted expectations and led all tax growth for the month,” Byson said. “A careful examination of monthly retail sales tax collections reveals growth in all categories except building materials, which was lower by 3.76 percent, and the furniture and home furnishings category, which was 9.76 percent lower than the same time last year. Strong growth from state business taxes and mixed drink taxes also aided in the month’s outperformance.
“We continue to be pleased with the overall tax growth for this fiscal year and we are anxiously awaiting to see April tax receipts. Historically, about 13 percent of our yearly revenue collections occur in the month of April, as nearly one-fourth of our yearly corporate franchise and excise tax receipts are remitted in the month. Therefore, we will continue to closely monitor our monthly tax revenues and remain cautiously optimistic.”
On an accrual basis, March is the eighth month in the 2022-2023 fiscal year.
General fund revenues were $161.2 million more than the budgeted estimate while the four other funds that share in state tax revenues were $13.3 million more than the estimates.
Sales tax revenues were $112.2 million more than the estimate for March and were 7.27 percent more than March 2022. For eight months revenues are $981.1 million more than estimated. The year-to-date growth rate for eight months was 8.92 percent.
Franchise and excise tax revenues combined were $53.5 million more than the budgeted estimate in March and the growth rate was 5.82 percent. For eight months, revenues are $436.7 million more than the estimate and the year-to-date growth rate is 12.17 percent.
Gasoline and motor fuel revenues for March increased by 2.36 percent compared to March 2022 but were $0.6 million less than the budgeted estimate of $85.9 million. For eight months, fuel tax revenues are below estimate by $8.4 million.
Motor vehicle registration revenues were $1.5 million more than the March estimate, and through eight months are $25.8 million more than budgeted. However, year-to-date growth compared to last year is lower due to the one-year registration renewal waiver for class A and class B drivers.
Tobacco tax revenues were $6.2 million less than the March budgeted estimate of $21 million. For eight months, revenues are $13.1 million less than the year-to-date budgeted estimate.
Privilege tax revenues were $6.5 million less than the March estimate. On a year-to-date basis, August through March, revenues are $45.4 million less than the estimate.
Business tax revenues were $9.4 million more than the March estimate. For eight months, revenues are $25.1 million more than the budgeted estimate.
Mixed drink, or liquor-by-the-drink, taxes were $5.7 million more than the March estimate, and on a year-to-date basis, revenues are $43.3 million more than the budgeted estimate.
All other taxes were more than budgeted estimates by a net of $5.5 million.
Year-to-date revenues, August through March, are $1.5 billion more than the budgeted estimate. The growth rate for eight months is 7.33 percent. General fund revenues are $1.3 billion more than the budgeted estimate and the four other funds are $135 million more than estimated.
The budgeted revenue estimates for 2022-2023 are based upon the State Funding Board’s consensus recommendation from November 23, 2021 and adopted by the second session of the 112th General Assembly in April 2022. Also incorporated in the estimates are any changes in revenue enacted during the 2022 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.