The Center Square [By Jon Styf] –
While the growth rate has dropped from the large increases of last fiscal year, Tennessee’s tax and fee collections continued to exceed the budgeted expectations in December.
Tennessee collected $2 million in December, the fifth month of the fiscal year, which was $217.2 million more than the budgeted estimate and still a nearly 5% increase from December 2021.
“December total tax collections represent the lowest monthly revenue growth for the current fiscal year to date,” said Tennessee Department of Finance and Administration Commissioner Jim Bryson. “Sales tax receipts, reflecting November retail sales activity, moderated significantly and correspond to the slowest rate of gain since September 2020 when it was 1.56%. While concerning, November’s modest sales tax growth was anticipated because of accelerated sales activity during this same time last year when supply chain disruptions altered purchasing behavior.”
For the year, Tennessee has collected $959.9 million more than the budgeted estimate, which includes $598.5 million more than estimated of sales tax. In December, sales tax collections were $118.8 million more than the budget.
“State corporate taxes, or franchise and excise taxes, made moderate gains for the month, but negative growth from tobacco taxes and privilege taxes diminished total tax proceeds. All other taxes combined were nearly flat compared to December 2021, but they exceeded our monthly budget estimates,” Bryson said. “It is fully expected that revenue growth will continue to moderate over the foreseeable future, however we must be cognizant that one month does not make a trend. As such, we will continue to closely monitor our revenues and expenditures throughout the remainder of this fiscal year.”
The second-largest factor was franchise and excise taxes, which beat the budget by $91.7 million in December and has beaten the fiscal year budget by $316.2 million, which is 13% higher than the first five months of last fiscal year.
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.