February Tax Collections Exceed Estimates by More Than $25M

Press release  from the Tennessee Department of Finance & Administration; March 13, 2015:

NASHVILLE, Tenn. – Tennessee tax collections exceeded the budgeted estimates in February. Department of Finance and Administration Commissioner Larry Martin today announced that overall February revenues were $787.2 million, which is $25.8 million more than the state budgeted for the month.

“Sales tax collections in February marked the seventh consecutive month this fiscal year in which collections exceeded budgeted expectations,” Martin said.  “As a result of a one-time event, Franchise and Excise tax collections were also above expectations.

“The renewed strength in our sales and corporate tax collections is an indication of an improving economy in Tennessee.  However, more than half of our annual corporate collections materialize April through June, so we’ll continue conservative spending and monitoring revenue activity.”

On an accrual basis, February is the seventh month in the 2014-2015 fiscal year.

The general fund was over collected by $13.1 million and the four other funds were over collected by $12.7 million.

Sales tax collections were $17.9 million more than the estimate for February.  The February growth rate was positive 7.62%. The year-to-date growth rate for seven months is positive 6.86%.

Franchise and excise taxes combined were $7.3 million above the budgeted estimate of $42.8 million. For seven months revenues are over collected by $165.2 million. The year-to-date growth rate for seven months is positive 29.41%.

Gasoline and motor fuel collections for February increased by 8.71%, and were $3.8 million above the budgeted estimate of $66.3 million. For seven months revenues are over collected by $14.5 million.

Tobacco tax collections were $3.3 million under the budgeted estimate of $21.5 million. For seven months revenues are under collected in the amount of $5.9 million.

Inheritance and estate taxes were under collected by $1.9 million for the month. Year-to-date collections for seven months are $12.0 million more than the budgeted estimate.

Privilege tax collections were $2.6 million less than the February estimate, and on a year-to-date basis, August through February, collections are $2.4 million above the estimate.

Business tax collections were $4.5 million above the February budgeted estimate, and for seven months collections are $18.3 million more than the budgeted estimate of $20.6 million.

All other taxes were over collected by a net of $0.1 million.

Year-to-date collections for seven months were $369.7 million more than the budgeted estimate. The general fund was over collected by $336.5 million and the four other funds were over collected by $33.2 million.

The budgeted revenue estimates for 2014-2015 are based on the State Funding Board’s consensus recommendation of December 17th, 2013 and adopted by the second session of the 108th General Assembly in April 2014. They are available on the state’s website at http://www.tn.gov/finance/bud/Revenues.shtml.

The Funding Board met on December 11, 2014 to hear updated revenue projections from the state’s various economists. The board met again on December 16 and adopted revised revenue ranges for 2014-2015. The revised ranges assume an over collection from the July 2014 budgeted estimate in the amount of $32.3 million to $73.4 million in total taxes. The revised ranges for the general fund recognize a negative growth in the amount of $6.6 million up to a positive growth of $27.5 million for the current fiscal year.