Tennessee Collected $3.4B More In Taxes & Fees Than Previously Estimated

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The Center Square [By Jon Styf] –

Tennessee has collected $3.4 billion more in taxes and fees this fiscal year than budgeted.

But many of those funds were allocated as an updated projection for the year and was recently approved by the Tennessee Legislature along with the state’s budget. That updated projection increased the annual estimate by $2.94 billion. Those updates are awaiting the signature of Gov. Bill Lee.

That allowed for the surplus to be allocated to different programs or tax and fees cuts during the budget process.

Those included a 30-day grocery tax break that will occur in August and a one-year moratorium on individual vehicle and motorcycle registrations.

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The grocery tax holiday is an estimated $80 million expense to the state with $49 million in lost grocery taxes and $31 million the state will send local governments to cover their portion of the taxes that would not be collected. The state budget appropriations set aside $82 million for the tax holiday.

The moratorium on state individual vehicle and motorcycle registration fees will have a $121.6 million impact.

“April tax revenues outperformed budget estimates for the month and continue to reveal a dynamic state economy,” said Finance and Administration Commissioner Butch Eley. “Much of the month’s tax growth can be attributed to franchise and excise tax payments and filings that reflect record high levels of profit and valuation from corporations during the past year. In addition, sales tax receipts, business tax revenues, privilege taxes and gas tax proceeds also greatly contributed to the state exceeding estimates for the month.

“While August through April revenues have now exceeded our revised budget estimates, we will continue to monitor revenue and expenditure patterns for the remainder of this fiscal year to financially position ourselves for the future.”

Tennessee taxes are reported on an accrual basis, making April the ninth month of the fiscal year. In all, the state collected $3 billion in taxes and fees for the month, which was $915.3 million more than the budgeted estimate and $525.9 million more than a year ago.

Sales taxes were $263 million more than estimated while gasoline and motor fuel taxes were $12.8 million more than estimated.

Vehicle registration fees were $2.4 million more than estimated and are $14.9 million more than estimated for the year. The one-year moratorium on those fees for individuals begins in July.

Privilege taxes were $22.2 million more than the April estimate and $138.9 million more than estimated for the year while businesses taxes were $24.8 above April estimates and $37 million more than the annual estimate.

About the Author: Jon Styf, The Center Square Staff Reporter – Jon Styf is an award-winning editor and reporter who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies. Follow Jon on Twitter @JonStyf.