NASHVILLE, Tenn. –Tennessee Finance and Administration Commissioner Jim Bryson today reported that August revenues were less than the budgeted estimates for the first month of the state’s fiscal year, as growth rates continue a return to normalcy. August revenues were $1.5 billion, which is $39.4 million less than the budgeted estimate and $1.7 million less than August 2022. All combined tax growth in August was flat at negative 0.11 percent with most of the decline driven by a drop in volatile Franchise and Excise tax collections.
“As anticipated, August revenues were slightly lower than budgeted estimates but were generally level with receipts received in August 2022,” Bryson said. “Sales and use tax revenues, reflecting consumer activity from the month of July, outperformed estimates and continue to reflect strong growth for the state. Corporate tax revenues for August, a small collection month, were lower than estimated due to a $15 million one-time tax refund and lower quarterly estimated payments. Also, privilege tax collections continue to remain under pressure as high interest rates persist, subduing realty transfer and realty mortgage tax collections.
“While the start of this fiscal year is proving to be a challenge, we remain cautiously optimistic and will continue to monitor economic activity and revenue trends as they develop.”
On an accrual basis, August is the first month in the 2023-2024 fiscal year.
General fund revenues were $44 million less than the August estimate while the four other funds that share in state tax revenues were $4.6 million more than the estimates.
Sales tax revenues were $25.4 million more than the estimate for August. The August growth rate was 3.17 percent.
Franchise and excise taxes combined were $47.8 million less than the budgeted estimate of $99.6 million and the growth rate was negative 43.30 percent.
Gasoline and motor fuel revenues increased by 0.69 percent from August 2022 and were $2.6 million more than the budgeted estimate of $107.1 million.
Motor vehicle registration revenues were $3 million less than the August estimate of $30.8 million.
Tobacco tax revenues for the month were less than budgeted estimates by $2.4 million.
Privilege tax revenues for August were $13.3 million less than the month’s estimate of $48.7 million.
Business tax revenues were $0.8 million less than the August estimate of $11 million.
All other tax revenues were less than estimates by a net of $0.1 million.
The budgeted revenue estimates for 2023-2024 are based upon the State Funding Board’s consensus recommendation from November 28, 2022 and adopted by the first session of the 113th General Assembly in April 2023. Also incorporated in the estimates are any changes in revenue enacted during the 2023 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.