Tennessee’s revenue for January surpassed budget expectations, as reported by Finance and Administration Commissioner Jim Bryson. The total tax revenue for the month was $1.97 billion, which is $23.6 million more than the budgeted estimate and $22.2 million higher than January 2024. The growth rate for the total tax was 1.14 percent.
General fund revenues were $20.0 million above the January estimate, while other state tax revenue funds collectively exceeded estimates by $3.6 million. January marks the sixth month of the 2024-2025 fiscal year on an accrual basis. Commissioner Bryson noted that sales tax revenues were bolstered by December’s retail activities during the holiday season. Although corporate tax receipts, including franchise and excise taxes, were slightly below estimates, the overall tax collections exceeded projections.
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From August to January, the year-to-date tax revenues were 0.06 percent above the budget estimate, amounting to $5.9 million more than expected. Compared to the same period last year, there was a $6.9 million increase in total tax revenues, representing a 0.07 percent growth. However, general fund revenues are currently 0.21 percent below the year-to-date budget estimate, equating to $18.9 million less, though they have shown a growth of 0.36 percent or $31.2 million compared to the previous year.
Specific tax performances against January 2025 Budgeted Estimates were as follows:
– Sales Taxes: 0.80% above estimate ($11.1 million)
– Corporate Taxes (Franchise & Excise): 0.82% below estimate ($2.4 million)
– Fuel Taxes: 0.50% below estimate ($0.5 million)
– All Other Taxes: 9.92% above estimate ($15.4 million)
Year-to-date performance compared to Budgeted Estimates included:
– Sales Taxes: 1.42% above estimate ($103.9 million)
– Corporate Taxes: 10.63% below estimate ($165.4 million)
– Fuel Taxes: 0.46% above estimate ($3.0 million)
– All Other Taxes: 6.98% above estimate ($64.3 million)
In comparison to January 2024:
– Sales Taxes increased by 5.26% or $70.0 million
– Corporate Taxes decreased by 15.55% or $53.6 million
– Fuel Taxes decreased by 0.24% or $0.3 million
– All Other Taxes increased by 3.71% or $6.1 million
Comparing August 2023 through January 2024:
– Sales Taxes rose by 5.59% or $394.3 million
– Corporate Taxes fell by 23.13% or $418.4 million
– Fuel Taxes increased by 0.70% or $4.6 million
– All Other Taxes increased by 2.75% or $26.4 million
The revenue estimates for the 2024–2025 fiscal year are grounded in the State Funding Board’s consensus from November 29, 2023, and were adopted by the 113th General Assembly’s second session in April 2024. These estimates include any revenue changes made during the 2024 General Assembly session. Detailed monthly estimates are accessible on the state’s website at Tennessee’s Budget Revenue Information.
On November 25, 2024, the State Funding Board recommended updated projections for the fiscal year, suggesting a negative growth range of 1.68 percent to 1.34 percent for total taxes, and 2.50 percent to 1.91 percent for general fund revenues. The Board’s upper limit and Governor Lee’s budget proposal for the 114th General Assembly’s first session did not alter the Department of Revenue’s current state tax revenue estimates for the 2024–2025 fiscal year.
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Tennessee State Offices Closed Due to Winter Storm
Tennessee Governor Bill Lee has ordered the closure of state offices in the West and Middle Grand Divisions on February 19 due to an incoming winter storm creating hazardous travel conditions. Online state services remain operational, and remote work is encouraged. The Tennessee Emergency Management Agency and Department of Transportation are coordinating efforts to manage the impact of the weather, with residents advised to limit non-essential travel.