NASHVILLE, Tenn. – Tennessee’s total tax collections exceeded budgeted expectations in January, driven by strong holiday consumer spending and unexpected one-time collections in corporate taxes. Finance and Administration Commissioner Larry Martin today announced that overall January revenues were $1.3 billion, which is $219.5 million more than the state budgeted.
“January sales tax collections, reflecting consumer spending that occurred during December, posted the largest monthly growth rate we’ve experienced for the past 33 months, and we recorded our strongest second quarter growth since 2006,” Martin said. “We believe this month’s growth was heavily influenced by several factors, including aggressive holiday retail marketing, continued reduction in the unemployment rate, lower gasoline prices, and an overall improving economy.
“It’s important to note that all corporate payments, including one-time payments, are received throughout the year based on estimates, and reconciled at a later point with their final corporate filings. Although good news, one-time payments, when identified, are separated from our recurring tax base and used only to support one-time expenditures and uses. As always, the state will keep the budget in balance by working closely with the legislature.”
On an accrual basis, January is the sixth month in the 2014-2015 fiscal year.
The general fund was over collected by $214.1 million and the four other funds were over collected by $5.4 million.
Sales tax collections were $34.2 million more than the estimate for January. The January growth rate was positive 7.80%. For six months revenues are over collected by $132.4 million. The year-to-date growth rate for six months was positive 6.76%.
Franchise and excise taxes combined were $171.4 million more than the budgeted estimate of $151.9 million. For six months revenues are over collected by $158.0 million.
Gasoline and motor fuel collections for January increased by 10.68% and were $2.4 million above the budgeted estimate of $71.3 million. For six months revenues are over collected by $10.7 million.
Motor Vehicle Registration Tax collections were $3.0 million more than the budgeted estimate for January and the growth rate was positive 5.56%.
Tobacco tax collections were $2.7 million more than the budgeted estimate of $18.1 million, and for six months they are $2.6 million under the budgeted estimate.
Inheritance and estate taxes were over collected by $4.5 million for the month. Year-to-date collections for six months are $13.9 million more than the budgeted estimate.
Privilege tax collections were $1.9 million less than the January estimate, and on a year-to-date basis, August through January, collections are $5.1 million above the estimate.
Business tax collections were $0.7 million more than the January estimate. For six months revenues are $13.8 million more than the budgeted estimate.
All other taxes were over collected by a net of $2.5 million.
Year-to-date collections for six months were $343.9 million more than the budgeted estimate. The general fund was over collected by $323.4 million and the four other funds were over collected by $20.5 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.