Tennessee revenues exceeded budgeted estimates for the month of January. Finance and Administration Commissioner Jim Bryson on Tuesday reported that total January tax revenues were $1.97 billion, $23.6 million more than the budgeted estimate and $22.2 million more than January 2024. The total tax growth rate for the month was 1.14 percent.
General fund revenues were $20.0 million more than the January estimate and the four other funds that share in state tax revenues were $3.6 million more than the estimates.
"January's total tax revenue exceeded our projected budget for the month," Commissioner Bryson said. "Sales tax revenues, driven by December taxable sales activity and the holiday shopping season, were robust, siding with strong U.S. retail sales for the month. Corporate tax receipts, including franchise and excise taxes, were slightly below but largely consistent with the month's estimates. All other taxes combined exceeded our January estimates.
"Year-to-date, total tax collections align closely with our estimates and are comparable to last year's collections at this time. While we are encouraged that our revenue collections are matching our set estimates, we are prepared to make needed adjustments in the future if necessary."
On a year-to-date basis, August through January, total tax revenues are 0.06 percent more than the budget estimate, or $5.9 million more than expectations. When compared to this same period last year, total tax revenues have increased by $6.9 million or 0.07 percent.
General fund revenues are 0.21 percent less than the year-to-date budgeted estimate, or $18.9 million lower. Likewise, year-to-date general fund collections compared to this same period last year have increased 0.36 percent or $31.2 million.
Individual tax performance compared to January 2025 Budgeted Estimates:
Sales Taxes: Above estimate by 0.80 percent or $11.1 million
Corporate Taxes (Franchise & Excise): Below estimate by 0.82 percent or $2.4 million
Fuel Taxes: Below estimate by 0.50 percent or $0.5 million
All other taxes: Above estimate by 9.92 percent or $15.4 million
Year-to-date performance compared to Budgeted Estimates:
Sales Taxes: Above estimate by 1.42 percent or $103.9 million
Corporate Taxes (Franchise & Excise): Below estimate by 10.63 percent or $165.4 million
Fuel Taxes: Above estimate by 0.46 percent or $3.0 million
All other taxes: Above estimate by 6.98 percent or $64.3 million
Individual tax performance compared to January 2024:
Sales Taxes: Up 5.26 percent or $70.0 million
Corporate Taxes (Franchise & Excise): Down 15.55 percent or $53.6 million
Fuel Taxes: Down 0.24 percent or $0.3 million
All other taxes: Up 3.71 percent or $6.1 million
Individual tax performance compared to August 2023 through January 2024:
Sales Taxes: Up 5.59 percent or $394.3 million
Corporate Taxes (Franchise & Excise): Down 23.13 percent or $418.4 million
Fuel Taxes: Up 0.70 percent or $4.6 million
All other taxes: Up 2.75 percent or $26.4 million
The budgeted revenue estimates for 2024–2025 are based on the State Funding Board’s consensus recommendation from Nov. 29, 2023, which was adopted by the second session of the 113th General Assembly in April 2024. These estimates also incorporate any revenue changes enacted during the 2024 General Assembly session. Monthly estimates for fiscal year 2024–2025 are available on the state’s website.
On Nov. 25, 2024, the State Funding Board met once again and recommended updated revenue projections for the 2024–2025 fiscal year. The Board adopted revised revenue growth ranges of negative 1.68 percent to negative 1.34 percent for total taxes and negative 2.50 percent to negative 1.91 percent for general fund revenues. The Board’s projected upper limit and the growth outlined in Governor Lee’s budget proposal for the first session of the 114th General Assembly reflect no changes to the current Department of Revenue’s state tax revenue estimates for the 2024–2025 fiscal year.