NASHVILLE – Department of Finance and Administration Commissioner Butch Eley has announced that Tennessee tax revenues exceeded budgeted estimates in March. Overall March revenues totaled $1.26 billion, which is $57.1 million or 4.75% more than the state received in March of 2020 and $112.1 million more than the budgeted estimate for the month.
“Most of the growth in March can be attributed to sales and use taxes, corporate taxes and business taxes, which have been strong contributors to revenue growth for most of the year,” Eley said. “March sales tax revenues, based on February sales tax activity, were positive across all industries except the restaurant and food services industry and apparel and accessories retailors. Additionally, sales tax receipts for the month were supported by approximately $39.7 million from remote sales and marketplace facilitator laws. To date, online sales tax revenues have accounted for about 65.4% of all sales tax growth to the state.
“We continue to be pleased with the overall growth in total taxes this fiscal year and we are encouraged at the prospect of future growth as Tennesseans become more comfortable resuming some activities. We are optimistic but cautious in anticipation of revenues in the months ahead.”
On an accrual basis, March is the eighth month in the 2020-2021 fiscal year.
General fund revenues were $115.2 million more than the budgeted estimate while the four other funds that share in state tax revenues were $3.1 million less than the estimates.
Sales tax revenues were $40.4 million more than the estimate for March and were 7.45% more than March 2020. For eight months revenues are $940.8 million more than estimated. The year-to-date growth rate for eight months was 7.15%.
Franchise and excise tax revenues combined were $69.1 million more than the budgeted estimate in March and the growth rate was 7.54%. For eight months, revenues are $419.1 million more than the estimate and the year-to-date growth rate is 4.85%.
Gasoline and motor fuel revenues for March decreased by 9.44% compared to March 2020 and were $6.3 million less than the budgeted estimate of $87 million. For eight months, fuel tax revenues are below estimate by $16.4 million.
Motor vehicle registration revenues were $2.2 million more than the March estimate, and on a year-to-date basis they are $9 million more than estimates.
Tobacco tax revenues were $1 million more than the March budgeted estimate of $18.6 million. For eight months, revenues are $8 million more than the year-to-date budgeted estimate.
Privilege tax revenues were $2.9 million more than the March estimate. On a year-to-date basis, August through March, revenues are $58.2 million more than the estimate.
Business tax revenues were $6.3 million more than the March estimate. For eight months, revenues are $27.1 million more than the budgeted estimate.
Hall income tax revenues for the month were $0.5 million more than the budgeted estimate. For eight months, revenues closely match the year-to-date budgeted estimate.
Mixed drink, or liquor-by-the-drink, taxes were $2.4 million less than the March estimate, and on a year-to-date basis, revenues are 23.5 million less than the budgeted estimate.
All other taxes were less than budgeted estimates by a net of $1.6 million.
Year-to-date revenues, August through March, are $1.42 billion more than the budgeted estimate. The growth rate for eight months is 4.97%. General fund revenues are $1.35 billion more than the budgeted estimate and the four other funds are $69.4 million more than estimated.
The budgeted revenue estimates for 2020-2021 are based on the State Funding Board’s consensus recommendation of November 26, 2019 and adopted by the second session of the 111th General Assembly in June 2020. Also incorporated in the estimates are any changes in revenue enacted during the 2020 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.