The Tennessee Department of Finance and Administration has reported that October revenues reached $1.5 billion. This figure is $22.6 million higher than the revenue from October of the previous year, yet $30.1 million short of the budgeted estimate. The growth rate for October was recorded at 1.53 percent.
In terms of specifics, general fund revenues were $27.1 million below the October estimate, while the four other funds sharing state tax revenues were $3.0 million under expectations. October marks the third month of the 2024-2025 fiscal year on an accrual basis.
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Bryson, a representative from the department, commented on the figures stating, “October’s total tax receipts fell below budgeted expectations for the month but showed an increase compared to October 2023.” He noted that sales tax revenues were slightly under the estimate, though they reflected a $60.3 million adjusted growth from the previous year’s reduced tax base. Corporate tax revenues, specifically franchise and excise taxes, did not meet estimates. However, fuel taxes, realty recordation, and transfer taxes exceeded monthly expectations.
Despite October’s modest revenue growth, the year-to-date figures from August through October indicate a 1.40 percent increase over the budget estimate, translating to $72.4 million above expectations. Compared to the same period last year, total tax revenues have risen by 1.51 percent or $77.8 million.
General fund revenues have surpassed the year-to-date budgeted estimate by 1.45 percent, or $61.7 million. Compared to the same period last year, general fund collections have increased by 1.99 percent or $84.3 million.
In terms of individual tax performance compared to the October 2024 budgeted estimates, sales taxes were below estimate by 1.11 percent or $13.1 million, corporate taxes (franchise and excise) were under by 26.61 percent or $21.2 million, while fuel taxes and all other taxes exceeded estimates by 1.18 percent ($1.3 million) and 1.85 percent ($2.9 million), respectively.
Year-to-date performance compared to the budgeted estimates shows that sales taxes are 0.95 percent or $34 million above estimate, corporate taxes (franchise and excise) are 0.82 percent or $6.4 million above estimate, fuel taxes are 0.98 percent or $3.3 million above estimate, and all other taxes are 6.04 percent or $28.7 million above estimate.
Comparing individual tax performance to October 2023, sales taxes increased by 4.39 percent or $49.2 million, corporate taxes (franchise and excise) decreased by 29.85 percent or $24.9 million, fuel taxes increased by 4.33 percent or $4.7 million, and all other taxes decreased by 3.78 percent or $6.3 million.
For the period from August through October 2023, sales taxes increased by 5.24 percent or $180.3 million, corporate taxes (franchise and excise) decreased by 11.94 percent or $106.5 million, fuel taxes increased by 0.37 percent or $1.3 million, and all other taxes increased by 0.57 percent or $2.8 million.
These budgeted revenue estimates for 2024-2025 stem from the State Funding Board’s consensus recommendation made on November 29, 2023, and were adopted by the second session of the 113th General Assembly in April 2024. The estimates also account for any revenue changes enacted during the 2024 General Assembly session. Monthly estimates can be accessed on the state’s website here.
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Tennessee Sets New Weekly Interest Rate
The Tennessee Department of Financial Institutions announced a new maximum effective formula interest rate of 11.90% per annum, based on a 4% ceiling above the current average prime loan rate of 7.90% as reported by the Federal Reserve. This rate will remain effective until the Federal Reserve updates the average prime loan rate. For more details, contact Alica Owen at the Tennessee Department of Financial Institutions.