State Finishes 2025-2026 Fiscal Year 5.24 Percent Ahead of Budgeted Projections
(UCBJ) – Tennessee tax revenues for July came in well above budgeted estimates, capping the 2025-2026 fiscal year on strong footing, according to figures released by the state Department of Finance and Administration.
Commissioner Jim Bryson reported total July tax revenues of $2.2 billion, $418.2 million more than the budgeted estimate and $337.8 million more than July 2025. The total tax growth rate for the month reached 18.39 percent.
General fund revenues were $404.8 million above the July estimate, while the four other funds that share in state tax revenues came in $13.4 million above projections.
Because July marks the final month of the fiscal year on an accrual basis, Bryson noted that final reported revenues will be subject to accrual accounting adjustments that could increase or decrease the recorded cash amounts once audited.
“July delivered a strong revenue performance,” Bryson said. “Better-than-expected sales tax growth, reflecting strong June consumer activity, and significant franchise and excise tax collections, drove higher revenue collections. Other taxes were near or above expectations.
“Tennessee will close fiscal year 2025-2026 significantly ahead of expectations, primarily due to a 13 percent revenue growth in the fourth quarter. While we are pleased to finish the fiscal year on such a strong note, it is important to remain cautious for the future. Some growth resulted from inflation, and F&E taxes vary significantly month to month. These corporate estimated payments may require adjustments once final tax liabilities are assessed. Therefore, we will continue to closely monitor economic conditions and manage the state’s finances responsibly.”
On a year-to-date basis, spanning August through July, total tax revenues ran 5.24 percent ahead of the budget estimate, or $1.2 billion above expectations. Compared with the same period last year, total tax revenues grew 7.65 percent, or $1.7 billion.
General fund revenues came in 5.91 percent above the year-to-date budgeted estimate, or $1.1 billion higher. General fund collections compared with the same period last year increased 7.65 percent, or $1.4 billion.
Individual tax performance compared to July 2026 budgeted estimates:
- Sales taxes: above estimate by 5.28 percent, or $69.2 million
- Corporate taxes (franchise and excise): above estimate by 286.94 percent, or $335.8 million
- Fuel taxes: above estimate by 4.08 percent, or $4.5 million
- All other taxes: above estimate by 3.93 percent, or $8.6 million
Year-to-date performance compared to budgeted estimates:
- Sales taxes: above estimate by 2.13 percent, or $320.3 million
- Corporate taxes (franchise and excise): above estimate by 19.29 percent, or $757.0 million
- Fuel taxes: below estimate by 0.11 percent, or $1.5 million
- All other taxes: above estimate by 4.51 percent, or $106.6 million
Individual tax performance compared to July 2025:
- Sales taxes: up 8.52 percent, or $108.3 million
- Corporate taxes (franchise and excise): up 82.64 percent, or $204.9 million
- Fuel taxes: up 5.92 percent, or $6.4 million
- All other taxes: up 8.68 percent, or $18.1 million
Individual tax performance compared to August 2024 through July 2025:
- Sales taxes: up 4.57 percent, or $670.0 million
- Corporate taxes (franchise and excise): up 22.09 percent, or $846.7 million
- Fuel taxes: down 0.01 percent, or $0.1 million
- All other taxes: up 7.53 percent, or $172.8 million
Image by rawpixel.com on Magnific.
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