January 2025 state revenues $27.2M above estimates

Tennessee revenues exceeded budgeted estimates for the month of January.  

Department of Finance and Administration Commissioner Jim Bryson reported that total January tax revenues were $2.1 billion, $27.2 million more than the budgeted estimate and $87.7 million more than January 2025. The total tax growth rate for the month was 4.45%. 

General fund revenues were $19.4 million more than the January estimate, while the four other funds that share in state tax revenues were $7.8 million more than the estimates. 

On an accrual basis, January is the sixth month in the 2025-2026 fiscal year. 

“January tax receipts have aligned fairly well with our budget estimates and reflected strong growth compared to last year,” said Bryson. “Sales tax revenues, driven by the December holiday shopping season, were slightly below our expectations but still demonstrated year-over-year growth. Corporate tax collections, including franchise and excise taxes, not only met but exceeded our expectations and continued to show an upward trend compared to last year's totals. Additionally, other tax revenues were generally in line with projections and grew healthily compared to the same period last year. Through the first half of the fiscal year, collections have exceeded expectations, and we are encouraged by the continued strength in state revenues. However, we remain committed to closely monitoring economic conditions to proactively address any potential impact on our revenue performance.” 

On a year-to-date basis, August through January, total tax revenues are 1.33% greater than the budget estimate, or $144.8 million above expectations. When compared to this same period last year, total tax revenues have grown 5.07% or $531.8 million. 

General fund revenues are 1.22% greater than the year-to-date budgeted estimate, or $111.3 million higher. Likewise, general fund collections compared to this same period last year have increased 4.68% or $411.8 million. 

Individual tax performance compared to January 2026 Budgeted Estimates: 

·        Sales Taxes: Below estimate by 0.24% or $3.5 million 

·        Corporate Taxes (Franchise & Excise): Above estimate by 2.32% or $6.7 million 

·        Fuel Taxes: Above estimate by 1.67% or $1.8 million 

·        All other taxes: Above estimate by 13% or $22.1 million 

Year-to-date performance compared to Budgeted Estimates: 

·        Sales Taxes: Above estimate by 1.62% or $123.6 million 

·        Corporate Taxes (Franchise & Excise): Below estimate by 3.22% or $51.0 million 

·        Fuel Taxes: Above estimate by 0.42% or $2.8 million 

·        All other taxes: Above estimate by 7.02% or $69.4 million 

Individual tax performance compared to January 2025: 

·        Sales Taxes: Up 4.31% or $60.3 million 

·        Corporate Taxes (Franchise & Excise): Up 1.41% or $4.1 million 

·        Fuel Taxes: Up 1.95% or $2.1 million 

·        All other taxes: Up 12.4% or $21.2 million 

Individual tax performance compared to August 2024 through January 2025: 

·        Sales Taxes: Up 4.25% or $316.4 million 

·        Corporate Taxes (Franchise & Excise): Up 10.22% or $142.1 million 

·        Fuel Taxes: Up 0.12% or $0.8 million 

·        All other taxes: Up 7.36% or $72.5 million 

The budgeted revenue estimates for 2025–2026 are based on the State Funding Board’s consensus recommendation from Nov. 25, 2024, which was adopted by the first session of the 114th General Assembly in April 2025. These estimates also incorporate any revenue changes enacted during the 2025 General Assembly session. Monthly estimates for fiscal year 2025–2026 are available on the state’s website.