Tennessee revenue collections obliterate estimates by $600M in April

The state Capitol on March 16, 2020. (Erik Schelzig, Tennessee Journal)

Tennessee’s general fund revenue collections were nearly $600 million above estimates in April, bringing the state’s surplus to $1.9 billion through the first nine months of the budget year.

Sales tax revenues beat projections by $285 million in April and were 32% higher than the same month last year. Collections reflect economic activity in the previous month.

Online sales tax collections represent 46.5% of all sales tax growth in the state since the beginning of the budget year.

Corporate franchise and excise taxes were $346 million more than expected in April, with a growth rate of 320% compared with last April.

Here’s the full release from the Department of Finance:

Tennessee Department of Finance and Administration Commissioner Butch Eley today announced that revenues for April exceeded the monthly revenues from the same month last year, which was at the beginning of the pandemic’s impact in Tennessee. Overall state revenues for April were $2.5 billion, which is $1.3 billion more than April 2020, and $596.7 million more than the budgeted estimates. The growth rate for all taxes in April was 90.90 percent.

“It’s important to remember that March and April of 2020 were the only two months where the state experienced a negative growth rate for collections during the pandemic, so in an effort to make realistic analysis, we’ve looked at collections for April 2019,” Eley said. “When we compare April of this year to 2020, the growth is 90.90 percent but compared to April 2019, the April growth rate for all taxes is 15.01 percent.

“Sales tax collections continue to reflect strong consumer activity and increased inflationary pressures that are beginning to appear in the cost of goods sold, as reflected in the latest CPI report. State corporate tax revenues greatly outperformed budgeted expectations as well, with many local companies experiencing a growth in earnings despite difficult circumstances. We should also keep in mind that April income tax receipts were lower than budgeted estimates due to a filing extension that moves the tax deadline into next month.

“Prior year month-to-month tax receipt comparisons for this month and the remainder of the year will appear distorted as periods of economic stoppage from the pandemic and the movement of multiple tax filing dates affect reported growth rates.”

On an accrual basis, April is the ninth month in the 2020-2021 fiscal year.

General fund revenues exceeded budgeted estimates by $599.9 million, while the four other funds that share in state tax revenues were $3.2 million less than the estimates.

Sales tax revenues were $284.9 million more than the estimate for April, 40.20 percent more than April 2020, and 31.78% more than April 2019. April sales tax revenues reflect retail business activity that occurred in March. For nine months, revenues are $1.2 billion higher than estimated. The year-to-date growth rate for nine months is 10.60 percent. Remote sales and marketplace facilitator laws contributed $54.9 million to sales tax receipts in the month of April. For nine months, online sales tax revenues represent 46.5 percent of all sales tax growth to the state.

Franchise and excise tax revenues combined were $346 million higher than the budgeted estimate in April, and the growth rate compared to April 2020 was positive 319.30 percent. For nine months, revenues are $765 million more than the estimate and the year-to-date growth rate is 47.22 percent.

Gasoline and motor fuel revenues for April decreased by 0.75 percent compared to April 2020 and they were $2.4 million less than the budgeted estimate of $104.7 million. For nine months revenues are less than estimated by $18.8 million.

Motor vehicle registration revenues were $4.7 million more than the April estimate, and on a year-to-date basis they are $13.6 million more than estimates.

Tobacco tax revenues were $1.5 million more than the April budgeted estimate of $17.5 million. For nine months, they are $9.5 million less than the budgeted estimate.

Hall income tax revenues for April were $58.5 million less than the budgeted estimate. A filing extension was granted for income taxes moving the filing date from April 15, 2021 to May 17, 2021.  (See: https://www.tn.gov/content/dam/tn/revenue/documents/notices/general/gen2102.pdf)

Privilege tax revenues were $14.2 million more than the April estimate, and on a year-to-date basis, August through April, revenues are $72.4 million more than the estimate.

Business tax revenues were $7.9 million more than the April estimate. For nine months, revenues are $35 million more than the budgeted estimate.

Mixed drink, or liquor-by-the-drink, taxes were $1.2 million less than the April estimate, and on a year-to-date basis, revenues are $24.7 million less than the budgeted estimate.

All other taxes were less than budgeted estimates by a net of $0.4 million.

Year-to-date revenues, August through April, are $2 billion more than the budgeted estimate. The growth rate for eight months is 14.72 percent. General fund revenues are $1.9 billion more than the budgeted estimate and the four other funds are $66.2 million more than estimated.

The budgeted revenue estimates for 2020-2021 are based on the State Funding Board’s consensus recommendation of November 26, 2019 and adopted by the second session of the 111th General Assembly in June 2020. Also incorporated in the estimates are any changes in revenue enacted during the 2020 session of the General Assembly. These estimates are available on the state’s website at https://www.tn.gov/content/tn/finance/fa/fa-budget-information/fa-budget-rev.html.

21 Responses to Tennessee revenue collections obliterate estimates by $600M in April

  • Avatar
    MARLE says:

    Thank you Amazon. While local shop keepers went broke Amazon online sales kept shoveling sales tax revenue to the state coffers. And to crow about a 32% increase this April compared to Last April when there were no cars on the road b/c nearly everything was in lock-down is really not saying much.

    But things are going to get much much better going forward now that the CDC has had their choker chain yanked.

  • Avatar
    Cryan says:

    Cut the grocery tax.

  • Avatar
    James White says:

    Fix the roads.

  • Avatar
    Stuart I. Anderson says:

    Now that we have eliminated the Hall Tax on poor retirees eeking out an existence on their interest and dividends its time to eliminate the nuisance professional tax on struggling physicians, dentists, lawyers, accountants, etc. Let freedom ring! Let the majority stop gouging the minority!

    • Avatar
      Phillip Lassiter says:

      Are you saying the Republican majority is gouging the minorities?

      • Avatar
        Stuart I. Anderson says:

        The gouging probably first took place during the dark days when Tennessee was a one party Democratic state, though the Tennessee Democrats of that long ago era were nothing like the crackpots who control the Democratic Party, even in Tennessee, today. The minority I am referring to are those in professions who have to pay these nuisance professional taxes. Now would be a good time for the Republican Super Majority to eliminate these taxes once and for all.

    • Avatar
      Taxpayer #314 says:

      Conservative thinking just boggles the mind sometimes!!

    • Avatar
      MARLE says:

      With the new 2017 “massive middle class tax cuts that won’t help the rich Not One Penny” professionals like doctors and dentist have seen their Federal Taxes slashed on the Pass Through rate reductions equal to about 20%. If they are set up as a C-Corp which they are allowed to do their rate dropped from 35% to 21%

      These “struggling professionals” have never had it so good. The pittance they pay in these TN taxes is peanuts compared to the money saved on taxes in the last 4 years. Facts, Stuart. Could we just finally start dealing with the facts????

      • Avatar
        Taxpayer #314 says:

        Stuart, when was the last time that you actually saw a “struggling dentist or lawyer?” Where do you get these phantasmagorical images from? Nowhere in Tennessee or in any other reality.

      • Avatar
        Stuart I. Anderson says:

        Oh Taxpayer, I am a right-wing zealot but with a very pleasing light-hearted personality so I make little jokes every once in a while which crack me up, but I can understand that when writing there is no facial expression or tone of voice to telegraph that I am making a joke.

        Yes, you are correct, there are few struggling physicians, dentists, etc. That’s still no reason to arbitrarily tax them just because you can.

        • Avatar
          Taxpayer #314 says:

          It is interesting that your joke went through the filter judges of this web site and other people have their jokes removed from the site for whatever reasons, but keep it up as I am also a light-hearted personality and I enjoy jokes, even the ones nobody gets.

        • Avatar
          MARLE says:

          If it was a joke it wasn’t a very good one. But what it did do is plant the seed that whether these professionals are “struggling” or Flourishing that they are plagued by an oppressive tax. This tax, considering the windfall they all received in 2017, is not a burden on any of them.

          Point 2 was the notion that the Hall tax is oppressing the poor people of TN when nothing about that is true. Only interest, dividends, and cap gain are taxed and there is NO tax if those proceeds come from a business operating in TN. Add to that it doesn’t tax any distributions from Retirement accounts. MOST Tennesseeans do not pay the Hall tax since it is a 1% tax with a threshold of 1500.

          So Stuart is not so much trying and Failing to be funny he is trying to slip into his comments things which are not born out by the facts. (why am I not surprised?)

          • Avatar
            Taxpayer #314 says:

            That is why so many of the general public are fleeing from the conservative republican party. They have nothing that is based in truth or reality. Facts don’t play a part in anything they do.

  • Avatar
    MARLE says:

    Poor retirees don’t pay any Hall tax. Since near Zero interest rates you have to have a pile of money outside of a retirement account to hit the deductible.

    • Avatar
      Stuart I. Anderson says:

      Thanks to the efforts of people like the great Brian Kelsey (ACU-87%), whose re-election is a top priority of the SIA Evangelical Conservative PCF, 2021 will mark the first year when the Hall Tax is no more. I was simply using the abolition of that tax as an example of how we can abolish other annoying taxes now that well managed Tennessee under conservative government is in the chips.

      • Avatar
        Cryan says:

        So giving money to Tim Tebow is conservative now?

        Making a mockery of constitutional checks and balances by creating a multi-million dollar governor’s chancery court is conservative now?

        Bailing out and/or allowing monopolies like AT&T, Brown Forman, Corrections Corporations of America, etc. subvert free market competition is conservative now?

  • Avatar
    Susan E Gingrich says:

    Rescind the gas tax increase which was never needed in the first place!

  • Avatar
    Phillip Lassiter says:

    They will spend all this money one time on BS and commit a good bit of it to recurring. The budget Wil again double in 15 years

  • Avatar
    Taxpayer #314 says:

    They got their repeating raise, then went on a long vacation, that is all they care about. Another tax cut for the rich, sure, why not?

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