The Center Square [By Jon Styf] –
Tennessee’s revenue collection continues to exceed the state’s budgeted expectations.
Tax revenue in August was $267.9 million more than budgeted estimates, reaching $1.4 billion. The growth rate for revenue was 22.11% higher than a year ago.
The August accrued numbers are for taxes collected from July. The August accruals start a new fiscal year for the state.
“Sales tax revenues, reflecting July’s consumer activity, and state corporate tax receipts (franchise and excise taxes) both posted substantial growth for the month compared to this same time last year,” Finance and Administration Commissioner Butch Eley said in a statement. “While sales and corporate taxes constitute nearly 93 percent of the month’s growth, there are notable increases in returns from eating and drinking establishments and consumer fuel utilization.”
Tennessee beat last year’s tax revenue estimates by $3.1 billion with $18 billion in total revenue, according to analysis from the Sycamore Institute.
Last year’s performance left “$2.1 billion that policymakers can allocate in future fiscal years as non-recurring funds,” according to the Sycamore Institute, after the budget estimate was revised in April.
The State Funding Board creates the estimates each year and has the ability to revise those estimates as the fiscal year proceeds.
The largest areas that went over the Funding Board’s estimates were sales tax revenue ($205.9 million more) and franchise and excise taxes ($61.2 million more), which were 122.88% higher than the budgeted estimate of $33.5 million. Franchise and excise taxes are paid by any business, corporation or company doing business in the state.
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Other taxes that topped estimates in the August were gasoline and motor fuel ($3.4 million more), tobacco ($3.5 million more), Hall income tax ($1.5 million more) and mixed or liquor-by-the-drink ($2.2 million more).
“The tax growth numbers for August continue to reflect a strong economic environment in our state and although we are pleased with the start to this new fiscal year, we must continue to remain attentive to inflationary pressures and the ongoing economic effects associated with the pandemic,” Eley said.
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.