Corporate Tax Revenues Dip In August, But State Growth Remains Strong

Tennessee revenue numbers for August have been released and for the first time this fiscal year, did not live up to budgeted estimates. Tennessee Department of Finance and Administration Commissioner Jim Bryson reported Tuesday that August revenues were $1.5 billion, which is $39.4 million less than the budgeted estimate and $1.7 million less than August 2022. But the dip was not totally unexpected. Bryson says Corporate tax revenues for August, a small collection month, were lower than estimated due to a $15 million one-time tax refund and lower quarterly estimated payments. Also, privilege tax collections continue to remain under pressure as high interest rates persist, subduing realty transfer and realty mortgage tax collections. Franchise and excise taxes combined were $47.8 million less than the budgeted estimate of $99.6 million and the growth rate was negative 43.30 percent.

However, Bryson says sales and use tax revenues, reflecting consumer activity from the month of July, outperformed estimates and continue to reflect strong growth for the state. Brysonj says Sales tax revenues were $25.4 million more than the estimate for August. The August growth rate was 3.17 percent. Gasoline and motor fuel revenues, which had decreased recentl increased by 0.69 percent from August 2022 and were $2.6 million more than the budgeted estimate. On an accrual basis, August is the first month in the 2023-2024 fiscal year.