In December, Tennessee’s tax revenues exceeded budget estimates, as reported by Finance and Administration Commissioner Jim Bryson. The total tax revenues for the month amounted to $1.9 billion, surpassing the budgeted estimate by $39.7 million, although this figure was $21.0 million less than December 2023.
General fund revenues surpassed December estimates by $36.7 million, while the four other funds sharing state tax revenues exceeded estimates by $3.0 million. December marks the fifth month of the 2024-2025 fiscal year on an accrual basis.
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Commissioner Bryson noted that the total tax receipts for December exceeded budgeted expectations, with sales tax revenues, reflecting taxable sales from November, showing notable growth compared to the previous year. Corporate tax receipts, which include franchise and excise taxes, also outperformed expectations.
Bryson emphasized the importance of maintaining careful oversight of future revenues and expenditures to ensure a balanced budget. For the period from August to December, total tax revenues were 0.21 percent below budget estimates, amounting to $17.7 million less than anticipated. Compared to the same period last year, total tax revenues decreased by $15.3 million or 0.18 percent.
General fund revenues were 0.55 percent below the year-to-date budgeted estimate, $38.9 million lower. Year-to-date general fund collections compared to the same period last year showed negligible growth of $0.3 million.
Here is a detailed breakdown of individual tax performance compared to December 2024 Budgeted Estimates:
– Sales Taxes: 0.46% above estimate, $5.4 million higher
– Corporate Taxes (Franchise & Excise): 5.90% above estimate, $25.7 million higher
– Fuel Taxes: 1.75% above estimate, $1.9 million higher
– All Other Taxes: 4.64% above estimate, $6.7 million higher
Year-to-date performance compared to Budgeted Estimates:
– Sales Taxes: 1.56% above estimate, $92.9 million higher
– Corporate Taxes (Franchise & Excise): 12.92% below estimate, $163.0 million lower
– Fuel Taxes: 0.66% above estimate, $3.6 million higher
– All Other Taxes: 6.39% above estimate, $48.9 million higher
Individual tax performance compared to December 2023:
– Sales Taxes: Increased by 3.23%, $37.3 million higher
– Corporate Taxes (Franchise & Excise): Decreased by 12.59%, $66.6 million lower
– Fuel Taxes: Increased by 3.58%, $3.7 million higher
– All Other Taxes: Increased by 3.14%, $4.6 million higher
Performance from August through December 2023:
– Sales Taxes: Increased by 5.66%, $324.3 million higher
– Corporate Taxes (Franchise & Excise): Decreased by 24.92%, $364.7 million lower
– Fuel Taxes: Increased by 0.89%, $4.8 million higher
– All Other Taxes: Increased by 2.55%, $20.3 million higher
The revenue estimates for the 2024-2025 fiscal year are based on the State Funding Board’s consensus recommendation from November 29, 2023, and were adopted by the General Assembly in April 2024. These estimates also account for any revenue changes enacted during the 2024 session of the General Assembly. Monthly estimates are available on the state’s website at Tennessee Finance and Administration.
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Tennessee Governor Calls Special Legislative Session
Tennessee Governor Bill Lee has called a special session of the Tennessee General Assembly to address key legislation, which includes the Education Freedom Act and a disaster relief package for recovery from Hurricane Helene. The session will also discuss public safety measures related to illegal immigration in light of potential policy changes under the incoming federal administration. The Education Freedom Act emphasizes school choice and investment in public education, while the disaster relief package proposes a substantial allocation of funds for immediate and future needs.