Tennessee Department of Finance and Administration Commissioner Butch Eley announced that revenues for June were $1.9 billion, which is $372.3 million more than the budgeted monthly revenue estimate.
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State tax revenues were $321.1 million more than June 2020 and the overall growth rate was 20.92 percent.
“June collections in the sales tax and corporate taxes, which are the franchise and excise taxes, continue to reflect extraordinary increases compared to this time last year when economic activity was weakened because of the pandemic,†Eley said. “When comparing June 2021 tax growth to June 2019, the monthly growth is 18.61 percent.
“Growth from sales and use tax revenues, reflecting taxable sales activity from the month of May, were supported by a return of consumer spending, heightened inflationary costs and sustained increases from online and remote retail activity.
Corporate tax collections also surpassed the month’s budget estimate with year-to-date corporate tax growth now surpassing a billion dollars. All other tax revenues, taken together, were lower than June 2020 primarily because of monthly tax filing shifts that occurred last year.
“With one month of revenue reporting remaining in the 2020-2021 fiscal year, the state will outperform the revenue estimates set for the year and should put the state in a good position to fund the 2021-2022 fiscal year. Nevertheless, we remain steadfast in our commitment to continue to budget conservatively.â€
On an accrual basis, June is the eleventh month in the 2020-2021 fiscal year.
General fund revenues were more than the budgeted estimates in the amount of $357.1 million and the four other funds that share in state tax revenues were $15.2 million more than the estimates.
Sales tax revenues were $173.2 million more than the estimate for June and were 22.64 percent more than June 2020. For eleven months, revenues are $1,656.9 million higher than estimated. The year-to-date growth rate is 14.86 percent.
Remote sales and marketplace facilitator laws contributed $50.2 million to sales tax receipts for the month and for the year, online sales tax revenues represent 35.27 percent of all sales tax growth to the state.
Franchise and excise tax revenues combined were $193.4 million greater than the budgeted estimate in June, and the growth rate compared to June 2020 was 45.06 percent. For eleven months, revenues are $1,044.4 million more than the estimate and the year-to-date growth rate is 49.01 percent.
Gasoline and motor fuel revenues for June increased by 18.38 percent compared to June 2020, and they were $5 million more than the budgeted estimate of $104.8 million. For eleven months, revenues are less than estimates by $6.1 million.
Motor vehicle registration revenues were $0.9 million more than the June estimate, and on a year-to-date basis, revenues are $16.4 million more than the estimate.
Tobacco tax revenues were $1.1 million more than the June budgeted estimate of $20.3 million. For eleven months, they are $15.7 million more than the budgeted estimate.
Hall income tax revenues for June were $0.2 million more than the budgeted estimate. August through June, revenues are $22.3 million less than the budgeted estimate.
Privilege tax revenues were $2.7 million less than the June estimate, and on a year-to-date basis, August through June, revenues are $99.1 million more than the estimate.
Business tax revenues were $1 million more than the June estimate of $8.9 million. For eleven months, revenues are $44.2 million more than the budgeted estimate.
Mixed drink, or Liquor-by-the-drink, taxes were $2.2 million more than the June estimate. For eleven months, revenues are $21.7 million less than the budgeted estimate.
All other tax revenues were less than estimates by a net of $2 million.
Year-to-date revenues for ten months were $2,816.9 million more than the budgeted estimate. The general fund recorded $2,696.3 million more than the budgeted estimate and the four other funds were $120.6 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.
On November 18, 2020, the State Funding Board met again to hear updated revenue projections from various state economists. Following this meeting, on November 24, 2020, the board decided to adopt revised revenue growth ranges for the current fiscal year.
The recurring growth ranges adopted include a low of 1.00 percent to a high of 1.20 percent for total taxes and a recurring range low of 1.50 percent to a high of 1.75 percent for general fund taxes.
On April 29, 2021, in the first session of the 112th General Assembly, the Legislature passed the 2021-2022 budget, which included the Funding Board’s revised revenue ranges for the current year.
Upon passage, an additional $1,034.1 million in total funds and $1,068.9 million in general fund revenue were added to this year’s original budgeted estimates. Public Chapter 454, known as the appropriations bill, was signed by Governor Lee on May 17, 2021. ■