State December revenues $437.2M above estimates

Tennessee Department of Finance and Administration Commissioner Butch Eley announced today that revenues for December were higher than expected and exceeded the monthly revenues from the previous year.

State revenues for December were $1.9 billion - or $437.2 million more than the budgeted estimate - with growth of 24.2%  from December 2020.

“December tax revenues exceeded budget estimates due to strong sales tax growth, corporate tax growth and realty tax collections included within privilege taxes,” Eley said. “Sales tax receipts, reflecting November retail sales activity, continue to benefit from a surge in consumer demand and the established marketplace facilitator law. In addition, it is estimated that some portion of retail purchasing may have shifted from December to November due to reports of supply chain disruptions. Next month’s January revenue report will fully capture consumer spending for the 2021 holiday season. While revenue collections continue to look promising, we will persist in closely monitoring our revenues and expenditures throughout the remainder of this fiscal year.”

On an accrual basis, December is the fifth month in the 2021-2022 fiscal year.

General fund revenues were more than the budgeted estimates in the amount of $411.3 million and the four other funds that share in state tax revenues were $25.9 million more than the estimates.

Sales tax revenues were $214 million more than the estimate for December. The December growth rate was 24.49%. For the first five months of this fiscal year, revenues are $923.6 million higher than estimated, and the year-to-date growth rate is 20.83&%.

Franchise and excise taxes combined were $188 million more than the December budgeted estimate. Year-to-date revenues exceed estimates in the amount of $589.4 million, or 42.09% more than the same period last year.

Gasoline and motor fuel revenues increased by 10.61% compared to last December and were $7.6 million more than the budgeted estimate of $97.8 million. For five months revenues are $21.7 million more than estimates.

Motor vehicle registration revenues were $2.7 million more than the December estimate and on a year-to-date basis they are $7.6 million more than estimates.

Tobacco tax revenues were $0.8 million more than the budgeted estimate of $19.9 million. For five months revenues are $2 million more than estimated.

Privilege tax revenues were $17.4 million more than the budgeted estimate of $28.5 million. Year- to-date revenues for five months are $62 million more than the budgeted estimate.

Business tax revenues were $1.9 million more than the December estimate and $0.6 million more than estimates on a year-to-date basis.

Mixed drink, or liquor-by-the-drink, taxes were $5 million more than the December estimate, and on a year-to-date basis, revenues are 95.05% higher than last year.

All other taxes for December recorded a net decrease of $0.2 million compared to estimates.

Year-to-date revenues for five months were $1.626 billion more than the budgeted estimate. The general fund recorded$1.523 billion in revenues more than estimates, and the four other funds recorded $102.9 million more than estimates.  Year-to-date growth for the first five months is 21.8%.

The budgeted revenue estimates for 2021-2022 are based on the State Funding Board’s consensus recommendation of November 24, 2020 and adopted by the first session of the 112th General Assembly in April 2021. Also incorporated in the estimates are any changes in revenue enacted during the 2021 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.