Tennessee tax collections $378M short of budget through 6 months of fiscal year

Published 3:57 pm Monday, February 19, 2024

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By Jon Styf

The Center Square

Tennessee’s January tax collections were $98 million less than budgeted but up $15.8 million from 2023.

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That puts the state $378 million behind its budgeted total for the first half of the fiscal year and $104 million short of collections from the first six months of last fiscal year.

“While we are encouraged to see some moderate revenue growth, we will continue to monitor economic activity and revenue trends to ensure fiscal stability,” Finance and Administration Commissioner Jim Bryson said.

January sales tax collections were nearly $13 million higher than a year before but $86 million short of the budgeted amount. For the six months, those collections were up $93 million from a year before but $72 million short of the budgeted total.

“State sales tax receipts, reflecting consumer spending during the December 2023 Christmas shopping season, grew modestly,” Bryson said. “Corporate taxes, or franchise and excise taxes, were less than this time last year, but were nearly in line with our estimates for the month. Furthermore, real estate mortgage tax collections, recorded within the privilege tax, continue to remain low as they were less than monthly estimates.

“All other taxes combined were $5.4 million above our revenue estimates and increased 6.14 percent compared to January 2023.”

Tennessee’s State Funding Board has adjusted the numbers based on collections falling consistently short of the budgeted totals this fiscal year. The estimates being used for next year’s budget adjusted down $718.8 million from original estimates to flat year-over-year and estimate next year’s collections to be a 0.5% increase from this year.