The Tennessee Department of Finance and Administration reported that the state’s revenues for November totaled $1.35 billion. This figure represents a decrease of $72.2 million compared to November of the previous year and is $129.8 million below the budgeted expectations.
General fund revenues were $137.3 million less than anticipated for November, while the other funds that share in state tax revenues exceeded estimates by $7.5 million. November marks the fourth month in the 2024-2025 fiscal year, assessed on an accrual basis.
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Commissioner Jim Bryson attributed the shortfall to weak corporate tax receipts, particularly franchise and excise taxes, which saw a decline due to refunds issued to calendar-year corporate tax filers. However, sales tax revenues remained strong, reflecting consumer activity from October. Adjusted for last year’s forgone revenue, sales tax collections grew by 3.9% compared to November 2023. Other state tax categories combined grew by nearly 5%.
Despite November’s numbers falling short of budgeted estimates, Commissioner Bryson noted positive trends in certain areas and expressed the department’s commitment to monitor state spending and economic activity.
From August to November, the total tax revenues were 0.86% or $57.4 million below the budget estimate. Compared to the same period last year, total tax revenues increased by 0.09% or $5.7 million. General fund revenues were 1.38% or $75.6 million lower than the year-to-date budgeted estimate, but they increased by 0.27% or $14.6 million compared to the previous year.
In terms of individual tax performance compared to November 2024 Budgeted Estimates, sales taxes were 4.51% or $53.4 million above estimate, while corporate taxes (franchise and excise) fell 417.28% or $195.2 million below estimate. Fuel taxes were slightly below estimate by 1.44% or $1.5 million, and all other taxes exceeded estimates by 9.23% or $13.5 million.
When compared to November 2023, sales taxes increased by 9.45% or $106.7 million, corporate taxes decreased by 443.24% or $191.6 million, fuel taxes slightly decreased by 0.12% or $0.1 million, and all other taxes saw an increase of 8.76% or $12.8 million.
For the period from August through November 2023, sales taxes were up 6.28% or $287 million, corporate taxes fell 31.89% or $298.2 million, fuel taxes rose by 0.26% or $1.1 million, and all other taxes increased by 2.42% or $15.7 million.
The budgeted revenue estimates for 2024-2025 are based on the State Funding Board’s consensus recommendation from November 29, 2023, and were adopted by the second session of the 113th General Assembly in April 2024. These estimates also account for any revenue changes enacted during the 2024 session of the General Assembly. All monthly estimates can be found on the state’s website at Tennessee State Budget Information.
To view the revenue tables, click here.
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Tennessee Sets New Interest Rate at 11.75%
The Tennessee Department of Financial Institutions has announced a maximum effective formula interest rate of 11.75% per annum, based on a ceiling 4% above the Federal Reserve’s weekly average prime loan rate of 7.75% as of December 16, 2024. This rate will remain the same until the Federal Reserve revises the average prime loan rate, in accordance with Chapter 464, Public Acts of 1983. For more details, contact Alica Owen, the Public Information Officer.