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TN Revenues ‘Below Expectations’ in June

Press release from the Tennessee Department of Finance & Administration; July 11, 2014:

NASHVILLE, Tenn. – Total tax collections for June were below budgeted expectations. Finance and Administration Commissioner Larry Martin reported today that June ended with a net negative growth of 0.45%, compared to collections in the same month one year ago. Overall June revenues were $1.2 billion, which is $67.5 million less than the state budgeted.

“June collections recorded stronger than anticipated sales tax growth, but continued to reflect weaker than anticipated collections from the corporate sector,” Martin said. “We continue to believe the recent up-tick in retail activity is an indication of renewed consumer confidence, and an economy slowly on the mend.” All other tax sources, taken as a group, were below budgeted expectations in June.

“For the remainder of this year, we will continue to closely monitor collections and expenditures.”

On an accrual basis, June is the eleventh month in the 2013-2014 fiscal year.

The general fund was under collected by $67.6 million, and the four other funds were over collected by $0.1 million.

Sales tax collections were $13.5 million more than the estimate for June. The June growth rate was positive 5.54%. For eleven months revenues are under collected by $15.5 million. The year-to-date growth rate for eleven months was positive 3.57%.

Franchise and excise taxes combined were $54.1 million below the budgeted estimate of $383.2 million. The growth rate for June was negative 3.55%. For eleven months revenues are under collected by $278.3 million and the year-to-date growth rate was negative 8.81%.

Privilege tax collections were $8.9 million below the June estimate. For eleven months collections are $23.0 million below the budgeted estimate.

Business tax collections were $9.0 million less than the June estimate. Year-to-date collections for eleven months are $10.2 million below the budgeted estimate.

Inheritance and estate tax collections were $0.7 million below the June estimate. For eleven months collections are $19.9 million above the budgeted estimate.

Tobacco tax collections were $6.6 million below the budgeted estimate of $25.7 million. For eleven months revenues are under collected by $13.2 million.

Gasoline and motor fuel collections for June were over collected by $3.1 million. For eleven months revenues are over collected by $4.8 million.

All other taxes for June were under collected by a net of $4.8 million.

Year-to-date collections for eleven months were $289.9 million less than the budgeted estimate. The general fund was under collected by $303.6 million and the four other funds were over collected by $13.7 million.

The budgeted revenue estimates for 2013-2014 are based on the State Funding Board’s consensus recommendation of December 19, 2012 and adopted by the first session of the 108th General Assembly in April 2013. They are available at http://www.tn.gov/finance/bud/Revenues.shtml.

The Funding Board met on December 10, 2013 to hear updated revenue projections from the state’s various economists. The board met again on December 17 and adopted revised revenue ranges for 2013-2014. The revised ranges assume an under collection from the July 2013 budgeted estimate in the amount of $111.2 million to $134.5 million in total taxes and in the amount of $126.1 million to $145.6 million in general fund taxes for the current fiscal year.

Amid Looming Budget Issues, Haslam Doubles Down on Tax Cut Rhetoric

Gov. Bill Haslam has acknowledged that decreasing state revenues will make producing a new budget more difficult this year than any other he’s faced since taking office.

But the governor, speaking to a Rutherford County Chamber of Commerce luncheon in Murfreesboro this week, said the tax cuts he’s supported in the past were intended to attract and retain capital in the state, and as such the right thing to do.

“Businesses do look at the taxes they pay — it’s just a fact of life. And so, we’ve worked on making certain that Tennessee stays what it’s historically been: one of the lowest tax states,” Haslam said.

The Tennessee General Assembly has cut about $160 million a year in taxes, Haslam said. The taxes cut include the Hall Income Tax, a 10 percent cut from the grocery tax, the gift tax, which Tennessee was one of only two states with a tax on, and the inheritance tax.

“Prior to this in Tennessee, if you died you paid a penalty for that – beyond the obvious one — and we just didn’t think that was right,” Haslam said.

The shortage in revenue receipts is not from the sales tax, which is “at, or just a little below projections,” but with the state’s franchise and excise tax collections, “which is a little hard for me to explain – to understand, so we’re trying to dive a little deeper with our Revenue Department to see what the miss is there,” Haslam told reporters after the event.

Haslam noted he was worried by national reports showing that holiday weekend sales after Thanksgiving were down a bit. “Obviously, when you live on the sales tax, Thanksgiving weekend is a pretty big deal,” said the governor.

Haslam also touted his administration’s other efforts to produce a more business-friendly climate in the state, despite ongoing criticism from Democratic lawmakers. “The GOP promised that if we gutted worker and consumer protections that we would become an oasis of job creation. Instead, our workers are being left behind in an economic recovery that has led to lower unemployment numbers in most other states,” House Democratic Caucus Chairman Mike Turner said in a press release slamming the Haslam administration over the state’s lofty unemployment.

However, Haslam stood by the reforms to tort law and workers compensation that his administration had pushed as helping to make the state “a much more attractive work environment.” The governor suggested that the political source of any economic sluggishness can be traced back to Congress and the president — in particular, the government shutdown and the questions surrounding the Affordable Care Act.

“People invest capital into a market that they have confidence in,” said Haslam, adding that confidence in Washington is low right now.

“So, what we’re trying to do in Tennessee is to provide that predictable environment that people know what they’re investing into. Unfortunately, the situation in Washington makes that very difficult to do, but we honestly think we can do that in Tennessee, and create that environment,” Haslam said.

June 11th Straight Month of ‘Positive Growth’ in TN Revenue Collections

Press release from the Tennessee Department of Finance & Administration; July 11, 2013:

NASHVILLE – Total Tennessee tax collections for June were weak, but exceeded budgeted expectations. Finance and Administration Commissioner Larry Martin reports that overall June revenues were $1.2 billion, which is $3.2 million more than the state budgeted. It marks the 11th consecutive month this year in which total collections have experienced positive growth.

Sales tax collections in June were flat, while corporate tax collections exceeded the budgeted estimate. All other tax sources, taken as a group, were above the budgeted estimates.

“The year-to-date growth rate for all taxes remains low and points to an economy that is still anemic and recovering slowly,” Martin said. “For the remainder of this year, we will continue to closely monitor collections and expenditures.”

On an accrual basis, June is the eleventh month in the 2012-2013 fiscal year.

The general fund was over collected by $8.9 million, and the four other funds were under collected by $5.7 million.

Sales tax collections were $0.1 million less than the estimate for June. The June growth rate was positive 1.18%. For eleven months revenues are under collected by $27.8 million. The year-to-date growth rate for eleven months was positive 1.67%.

Franchise and excise taxes combined were $2.3 million above the budgeted estimate of $338.9 million. The growth rate for June was negative 8.85%. For eleven months revenues are over collected by $278.9 million and the year-to-date growth rate was 8.76%.

Privilege tax collections were $0.9 million above the June estimate. For eleven months collections are $30.1 million above the budgeted estimate.

Business tax collections were $1.2 million more than the June estimate. Year-to-date collections for eleven months are $1.4 million above the budgeted estimate.

Inheritance and estate tax collections were $7.9 million above the June estimate. For eleven months collections are $35.4 million above the budgeted estimate.

Tobacco tax collections were $2.4 million below the budgeted estimate of $27.8 million. For eleven months revenues are under collected by $11.0 million.

Gasoline and motor fuel collections for June were under collected by $4.0 million. For eleven months revenues are under collected by $22.5 million.

All other taxes for June were under collected by a net of $2.6 million.

Year-to-date collections for eleven months were $322.8 million more than the budgeted estimate. The general fund was over collected by $328.6 million and the four other funds were under collected by $5.8 million. The FY 2013 revised budget assumed an over collection of $305.9 million in General Fund Taxes. Therefore, the amount of over collection, August through June, compared to what’s in the revised FY 2013 budget is $16.9 million ($322.8 million minus $305.9 million).

The budgeted revenue estimates for 2012-2013 are based on the State Funding Board’s consensus recommendation of December 19th, 2011 and adopted by the second session of the 107th General Assembly in April 2012. They are available on the state’s website at http://www.tn.gov/finance/bud/budget.html.

The State Funding Board met on December 14, 2012 to hear updated revenue projections from the state’s various economists. The board met again on December 19th and adopted revised revenue ranges for 2012-2013. The revised ranges assume an over collection from the July 2012 budgeted estimate in the amount of $203.0 million to $287.3 million in total taxes and in the amount of $224.2 million to $305.9 million in general fund taxes for the current fiscal year.

May Revenue Collection Continues Upward Growth Trend

Press release from the Tennessee Department of Finance & Administration; June 11, 2013:

NASHVILLE, Tenn. – Tennessee revenue collections continued an upward growth trend in May with a net positive growth of 3.92% over collections made in the same month last year. Finance and Administration Commissioner Larry Martin reported today that overall May revenues were $905.3 million or $31.5 million more than the state budgeted. It’s the tenth consecutive month this fiscal year in which total collections have reflected positive growth.

“The sales tax growth rate rebounded in May compared to earlier months, mainly because of building materials sales and purchases of new automobiles,” Martin said. “Corporate tax collections continued to show strong growth, exceeding budgeted expectations.

“Tennessee’s sales tax collections suggest that we are continuing to slowly recover from the worst recession on record. Slow recovery coupled with national and global economic concerns call for us to closely monitor collections and expenditures for the remainder of the year.”

On an accrual basis, May is the tenth month in the 2012-2013 fiscal year.

The general fund was over collected by $35.3 million, and the four other funds were under collected by $3.8 million.

Sales tax collections were $11.2 million more than the budgeted estimate for May. The May growth rate was positive 3.97%. For ten months revenues are under collected by $27.7 million. The year-to-date growth rate for ten months was positive 1.72%.

Franchise and excise taxes combined were $8.8 million above the budgeted estimate of $45.3 million. For ten months revenues are $276.6 million over the budgeted estimate.

Inheritance and estate tax collections were $17.0 million above the May estimate. For ten months collections are $27.5 million above the budgeted estimate.

Privilege tax collections were $3.5 million more the May budgeted estimate, and for ten months collections are $29.2 million above the budgeted estimate.

Gasoline and motor fuel collections for May decreased by 7.26%, and were $3.9 million less than the budgeted estimate. For ten months revenues are negative 2.63%, and $18.5 million below the budgeted estimate of $702.5 million.

Business tax collections were $2.0 million less than the May estimate and year to date for ten months collections are $0.2 million above the budgeted estimate.

Tobacco tax collections were $1.7 million below the budgeted estimate of $23.0 million. For ten months revenues are under collected in the amount of $8.6 million.

All other taxes for May were under collected by a net of $1.4 million.

Year-to-date collections for ten months were $319.6 million more than the budgeted estimate. The general fund was over collected by $319.7 million and the four other funds were under collected by $0.1 million. The FY 2013 revised budget assumed an over collection of $305.9 million in General Fund Taxes. Therefore, the amount of over collection, August through May, compared to what’s in the revised FY 2013 budget is $13.8 million ($319.7 million minus $305.9 million).

The budgeted revenue estimates for 2012-2013 are based on the State Funding Board’s consensus recommendation of December 19th, 2011 and adopted by the second session of the 107th General Assembly in April 2012. They are available on the state’s website at http://www.tn.gov/finance/bud/budget.html.

The State Funding Board met on December 14, 2012 to hear updated revenue projections from the state’s various economists. The board met again on December 19th and adopted revised revenue ranges for 2012-2013. The revised ranges assume an over collection from the July 2012 budgeted estimate in the amount of $203.0 million to $287.3 million in total taxes and in the amount of $224.2 million to $305.9 million in general fund taxes for the current fiscal year.

Grocery Sales Tax Cut Signed by Haslam

Press release from the Office of Tennessee Gov. Bill Haslam; May 21, 2013:

VONORE – Tennessee Gov. Bill Haslam today traveled to Monroe County to sign legislation to reduce the state portion of the sales tax on groceries from 5.25 percent to 5 percent.

Haslam held a ceremonial bill signing at Sloan’s Grocery in Vonore, Tenn.

In 2012, the General Assembly passed and the governor signed the first step in reducing the state portion of the sales tax on groceries, lowering the rate from 5.5 percent to 5.25 percent.

“We’re lowering taxes and balancing the state budget by managing conservatively, making strategic investments in our priorities and finding new ways to make government more efficient and effective,” Haslam said. “The sales tax on food impacts all Tennesseans, and I applaud the General Assembly for passing this important piece of legislation this year.”

The bill, SB 199/HB 193, was introduced by the governor and was one of two tax cuts passed by the legislature and signed by Haslam this year as the state continues its work toward providing the best customer service at the lowest possible cost to taxpayers.

Senate Majority Leader Mark Norris (R-Collierville), House Majority Leader Gerald McCormick (R-Chattanooga) and state Rep. Ryan Haynes (R-Knoxville) sponsored the bill.

Haslam included $23 million in the FY 2013-2014 state budget to fund the legislation. The legislation goes into effect July 1, 2013.

The reduced tax rate does not apply to prepared foods such as a meal at a restaurant, candy, alcoholic beverages or tobacco.

State Offers Instructional Videos to Assist Taxpayers with Difficulties of Tax Time

Press release from the Tennessee Department of Revenue; January 11, 2013:

Nashville, Tenn. – At the beginning of a new year, many taxpayers begin to think about their taxes. Navigating through the sea of forms, instructions, and calculations can seem to be a difficult task and is a real challenge for many Tennesseans.

The Tennessee Department of Revenue announced today that the first installment of their Tennessee Tax Video Series is now available on the department’s website, www.TN.gov/revenue. The first video addresses registration for electronic filing. Many of Tennessee’s tax returns and payments are required to be made electronically by law. This instructional video lets taxpayers know exactly what is required to get the on-line tax process started.

“Tennessee’s tax structure depends on taxpayers voluntarily complying with the laws,” said Revenue Commissioner Richard H. Roberts. “We want to offer taxpayers assistance in every way possible. We have other help available during normal business hours, but having instructional videos available 24 hrs. a day, seven days a week allows taxpayers to access key information whenever they’d like. We look forward to being able to expand our selection of videos significantly in the future.”

Other upcoming videos will include how to file a sales tax return and payment electronically and how to properly file a business tax return and payment on-line. Future installments will address other common state tax issues involving many other subjects.

In addition to the new instructional videos, the Department reminds taxpayers that telephone service is available from 7 a.m. to 5 p.m., Central time, Monday through Friday, excluding holidays at (800) 342-1003 (toll-free in Tennessee) or at (615) 253-0600 (Nashville and outside Tennessee). The department’s website – www.TN.gov/revenue – also has information on many tax issues as well as vehicle titling and registration. E-mail service is also available at tn.revenue@tn.gov.

State Takes in Nearly $1B in Revenue Collections for December

Press release from the Tennessee Department of Finance & Administration; January 10, 2012:

NASHVILLE – Tennessee revenue collections for December came in stronger than the same month a year before. Finance and Administration Commissioner Mark Emkes reported today that state revenue collections for December were $982.2 million, which is 1.71% above December 2011. December sales tax collections represent consumer spending that occurred in November.

“Total revenues in December were higher than expected due to over collections in the sales and corporate tax categories,” Emkes said. “We believe the December sales tax growth rate, which includes ‘Black Friday’ and after-Thanksgiving sales, may reflect renewed consumer confidence, but January’s report will give us a fuller picture with Christmas retail activity.

“Because of anticipated requirements for Fiscal Year 2014, we will closely monitor our spending for the balance of this year, working closely with the Legislature in order to end this year with a balanced budget.”

On an accrual basis, December is the fifth month in the 2012-2013 fiscal year.

December collections were $22.0 million more than the budgeted estimate. The general fund was over collected by $24.8 million and the four other funds were under collected by $2.8 million.

Sales tax collections were $11.7 million more than the estimate for December. The December growth rate was 5.01%. For five months revenues are under collected by $18.3 million, and the year-to-date growth rate is 2.51%.

Franchise and excise taxes combined were $12.6 million above the budgeted estimate of $230.4 million. For five months revenues are over collected by $91.4 million.

Gasoline and motor fuel collections for December decreased by 7.52% and they were $3.4 million below the budgeted estimate of $66.1 million. For five months revenues are under collected by $11.8 million.

Tobacco tax collections were $2.2 million below the budgeted estimate of $24.9 million, and for five months they are $6.7 million below the budgeted estimate.

Privilege tax collections were $3.8 million more than the budgeted estimate of $14.5 million. Year-to-date collections for five months are $10.8 million above the budgeted estimate.

Inheritance and estate taxes were under collected by $1.6 million for the month. For five months collections are $4.4 million above the budgeted estimate.

All other taxes were over collected by a net of $1.1 million.

Year-to-date collections for five months were $73.6 million more than the budgeted estimate. The general fund was over collected by $84.1 million and the four other funds were under collected by $10.5 million.

The budgeted revenue estimates for 2012-2013 are based on the State Funding Board’s consensus recommendation of December 19th, 2011 and adopted by the second session of the 107th General Assembly in April 2012. They are available on the state’s website at http://www.tn.gov/finance/bud/budget.html.

The State Funding Board met on December 14, 2012 to hear updated revenue projections from the state’s various economists. The board met again on December 19 and adopted revised revenue ranges for 2012-2013. The revised ranges assume an over collection from the July 2012 budgeted estimate in the amount of $203.0 million to $287.3 million in total taxes and in the amount of $224.2 million to $305.9 million in general fund taxes for the current fiscal year.

Emkes: September Sees Positive Growth in Corporate Tax Revenues for State

Press release from the Department of Finance & Administration; October 9, 2012:  

NASHVILLE – Sales tax collections in Tennessee continued to show marginal growth in September revenue figures. Finance and Administration Commissioner Mark Emkes reported today that overall September revenues were $1.1 billion, which is 5.45% above the budgeted estimate. September sales tax collections reflect spending that occurred in August.

“The sales tax is the ‘bread and butter’ of our revenue collections in Tennessee, and it’s our leading economic indicator,” Emkes said. “September sales tax collections continue to reflect the sluggish national economy, but we are very pleased with the positive growth rates reported in corporate franchise and excise taxes.

“Leading economic indicators on the national level continue to reflect mixed results, which calls for continued scrutiny of expenditures for the balance of this fiscal year, so we can keep the budget in balance and conservatively manage the state’s spending.”

On an accrual basis, September is the second month in the 2012-2013 fiscal year.

September collections were $55.8 million more than the budgeted estimate. The general fund was over collected by $57.7 million and the four other funds were under collected by $1.9 million.

Sales tax collections were $2.2 million less than the estimate for September. The September growth rate was 2.84%.

Franchise and excise taxes combined were $54.9 million above the September budgeted estimate of $254.2 million. The September growth rate was positive 22.31%.

Gasoline and motor fuel collections for September decreased by 2.12% and were $3.0 million below the budgeted estimate of $71.5 million.

Tobacco tax collections for the month were under collected by $2.9 million, and the growth rate was negative 7.51%.

Privilege tax collections were $5.3 million more than the budgeted estimate of $15.4 million.

Inheritance and estate tax collections were $0.1 million above the budgeted estimate.

All other taxes were over collected by a net of $3.6 million.

Year-to date collections for two months were $41.9 million more than the budgeted estimate. The general fund was over collected by $51.4 million and the four other funds were under collected by $9.5 million.

The budgeted revenue estimates for 2012-2013 are based on the State Funding Board’s consensus recommendation of December 19th, 2011 and adopted by the second session of the 107th General Assembly in April 2012. They are available on the state’s website at http://www.tn.gov/finance/bud/budget.html.

Gas-Tax Talks Not on Administration’s Immediate To-Do List

State transportation officials say the state needs to start thinking about how to charge drivers for using state roads, but the governor says there’s no consensus to tackle that issue this year.

While the state transportation department says the issue is squarely on the administration’s radar, Gov. Bill Haslam says the topic won’t be among those he’s interested in come 2013.

“We definitely won’t be addressing that this year,” Haslam told reporters Thursday following an economic development announcement in Nashville, adding that both he and Transportation Commissioner John Schroer believe it’s “inevitable” that the state will have to address that issue down the road.

“The way we’re paying for roads and bridges now won’t work long-term. And I think John’s acknowledging that. That being said, there’s not much consensus about how you do fix that problem,” he said.

Schroer is in the middle of a fall tour to various transportation projects across the state. The department has $9.5 billion worth of projects under development, but only has about $900 million to work with this year.

The issue is nothing new to Tennessee. Schroer told the governor and other high-ranking officials during budget hearings last year that the state will need to reconsider how it collects money for roads as people shift to vehicles that guzzle less gas.

Tennessee charges 21.4 cents a gallon for gasoline, ranking in the bottom third of state gas tax rates in the country, according to the American Petroleum Institute. The state tax on diesel is 18.4 cents a gallon. That’s on top of a federal tax of 18.4 cents a gallon on gasoline and 24.4 cents a gallon on diesel.

The Beacon Center suggests the state consider other options besides simply raising the tax on fuel. The free-market think tank released a report this week analyzing the state’s various options, like charging taxes based on miles traveled, emissions or installing toll roads.

Not all the money from the gas tax is spent on highways. Across the country, the gas tax has been diverted for other projects, including schools, parks and beautification.

Haslam last year said it’s possible he’ll put off serious talk about rejiggering gas taxes until a possible second term.

July Brings in $9.9M More Taxes Than State Budgeted

Press release from the Tennessee Department of Finance & Administration; August 9, 2012: 

NASHVILLE – Tennessee revenue collections continued their upward trend in July, but at a much slower pace compared to recent months. Finance and Administration Commissioner Mark Emkes today announced a net positive growth of 4.46% over July collections of one year ago. Overall July revenues were $880.9 million, which is $9.9 million more than the state budgeted.

July marks the 12th consecutive month this year in which total collections have exceeded the budgeted estimates. July sales tax collections represent consumer spending that took place in the month of June.

“We continue to believe the growth in sales and corporate tax collections indicates a very slow economic recovery in Tennessee, but we also continue to see mixed results at the national level,” Emkes said. “The latest published leading economic indicators show that the U.S. economy decelerated in the second quarter, which causes concern at the state level.

“We’ll close fiscal year 2012, which ended June 30, with a revenue surplus which will help maintain a balanced budget in fiscal 2012-2013.”

On an accrual basis, July is the twelfth month in the 2011-2012 fiscal year.

The general fund was over collected by $2.7 million, and the four other funds were over collected by $7.2 million.

Sales tax collections were $14.7 million more than the estimate for July. The July growth rate was 3.30%. For twelve months revenues are over collected by $241.8 million. The year-to-date growth rate for twelve months was positive 6.57%.

Franchise and excise taxes combined were $0.8 million under the budgeted estimate of $55.5 million. The growth rate for July was positive 8.64%. For twelve months revenues are over collected by $308.2 million and the year-to-date growth rate was positive 22.26%.

Inheritance and estate tax collections were $10.1 million below the July estimate. For twelve months collections are $37.9 million above the budgeted estimate.

Privilege tax collections were $1.1 million above the July budgeted estimate. For twelve months collections are $9.0 million more than the budgeted estimate, and the year-to date growth rate was positive 11.71%.

Business tax collections were $1.0 million less than the July estimate. Year-to-date collections for eleven months are $15.9 million below the budgeted estimate.

Tobacco tax collections were $2.6 million below the budgeted estimate of $25.9 million. For twelve months revenues are under collected by $18.5 million.

Gasoline and motor fuel tax collections for July were over collected by $3.4 million. For twelve months revenues are under collected by $5.1 million.

All other taxes for July were over collected by a net of $5.2 million.

Year-to-date collections for twelve months were $563.8 million more than the budgeted estimate. The general fund was over collected by $543.0 million and the four other funds were over collected by $20.8 million. The FY 2012 revised budget assumed an over collection of $209.6 million in General Fund Taxes. Therefore, the amount over collected above and beyond what’s already in the budget is $333.4 million ($543.0 million minus $209.6 million).

The budgeted revenue estimates for 2011-2012 are based on the State Funding Board’s consensus recommendation of April 15, 2011 and adopted by the first session of the 107th General Assembly in May. They are available on the state’s website at http://www.tn.gov/finance/bud/budget.shtml.

The State Funding Board met on December 9th and 14th to hear updated revenue projections from the state’s various economists. The board met again on December 19th and adopted revised revenue ranges for 2011-2012. The revised ranges assume an over collection of $187.8 million to $220.5 million in total taxes and $177.0 million to $209.6 million in general fund taxes from the fiscal year 2011-2012 budgeted estimate. The revised estimates are reflected on pages A-74 and A-76 in the 2012-2013 Budget Document.

Year-to-date collections for 2011-2012 are subject to final accrual adjustments.