NASHVILLE – Tennessee Department of Finance and Administration Commissioner Butch Eley today announced that Tennessee tax revenues exceeded budgeted estimates in February. February revenues totaled $1.2 billion, which is $111.7 million more than the state received in February 2021 and $212 million more than the budgeted estimate. The growth rate for February was 9.87 percent.
“Sales tax revenues, reflecting January’s taxable consumer activity, outperformed our budgeted revenue estimate increasing the state’s positive revenue balance for the year,” Eley said. “We continue to experience increasing tax revenues tied to rising consumer prices and real estate transactions. Additionally, corporate tax revenues, or franchise and excise tax receipts, surpassed budgeted expectations while all other taxes taken together revealed minor growth.
“With a large year-to-date revenue balance, we have confidence that the state should finish the 2021-2022 fiscal year above our established revenue estimates. However, we remain concerned that mounting inflation and rising fuel costs will restrain future consumer spending. Therefore, we will continue to closely monitor economic conditions and our monthly tax receipts through the remainder year.”
On an accrual basis, February is the seventh month in the 2021-2022 fiscal year.
General fund revenues exceeded the budgeted estimates in the amount of $210.3 million while the four other funds that share in state tax revenues were $1.7 million more than the estimates.
Sales tax revenues were $163.5 million more than the estimate for February and 9.98 percent more than February 2021. For seven months, revenues are $1.3 billion higher than estimated. The year-to-date growth rate for seven months was 16.95 percent.
Franchise and excise tax revenues combined were $35 million more than the budgeted estimate in February and the growth rate compared to February 2021 was 33.13 percent. For seven months, revenues are $714.2 million more than the estimate and the year-to-date growth rate is 35.66 percent.
Gasoline and motor fuel revenues for February increased by 4.89 percent compared to February 2021 and were $5.3 million more than the February budgeted estimate of $92.5 million. For seven months, revenues are more than estimates by $33.7 million.
Motor vehicle registration revenues were $7 million less than the February estimate, and on a year-to-date basis they are $2.1 million more than estimates.
Tobacco taxes were $3.3 million less than the February budgeted estimate of $17.7 million. For seven months, they are $3.8 million less than the budgeted estimate.
Privilege taxes were $14.4 million more than the February estimate, and on a year-to-date basis, August through February, revenues are $103.5 million more than the estimate.
Business taxes were $1.6 million more than the February estimate. For seven months, revenues are $4.3 million more than the budgeted estimate.
Hall income tax revenues for the month were $0.4 million more than the budgeted estimate. On a year-to-date basis, income tax revenues are $3.9 million more than the estimate.
Mixed drink, or liquor-by-the-drink, taxes were $3.5 million more than the February estimate, and on a year-to-date basis, revenues are $27.1 million more than the budgeted estimate.
All other tax receipts were less than estimates by a net of $1.4 million.
Year-to-date revenues for six months were $2.15 billion more than the budgeted estimate. The general fund recorded $2.02 billion in revenues more than estimates, and the four other funds totaled $126.7 million more than year-to-date estimates.
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.