Tennessee revenues exceeded budgeted estimates for the month of February. Finance and Administration Commissioner Jim Bryson on Tuesday reported that total February tax revenues were $1.37 billion, $16.9 million more than the budgeted estimate and $45.3 million more than February 2024. The total tax growth rate for the month was 3.42 percent.
General fund revenues were $27.2 million more than the February estimate and the four other funds that share in state tax revenues were $10.3 million less than the estimates.
"February’s tax collections remain on track with our estimates," Commissioner Bryson said. “Sales tax receipts, reflecting January's taxable sales activity, were notably strong. While corporate tax revenues fell short of expectations, all other tax categories collectively exceeded our projections for the month.
“As we move into the latter half of the fiscal year, we will continue to closely monitor the economy and consumer demand to ensure we meet our monthly budget targets."
On a year-to-date basis, August through February, total tax revenues are 0.19 percent more than the budget estimate, or $22.8 million more than expectations. When compared to this same period last year, total tax revenues have increased by $52.2 million or 0.44 percent.
General fund revenues are 0.08 percent more than the year-to-date budgeted estimate, or $8.3 million greater. Likewise, year-to-date general fund collections compared to this same period last year have increased 0.92 percent or $89.6 million.
Individual tax performance compared to February 2025 Budgeted Estimates:
Sales Taxes: Above estimate by 1.96 percent or $20.9 million
Corporate Taxes (Franchise & Excise): Below estimate by 25.02% or $13.8 million
Fuel Taxes: Below estimate by 4.04 percent or $4.0 million
All other taxes: Above estimate by 10.24 percent or $13.9 million
Year-to-date performance compared to Budgeted Estimates:
Sales Taxes: Above estimate by 1.48 percent or $124.8 million
Corporate Taxes (Franchise & Excise): Below estimate by 11.13% or $179.3 million
Fuel Taxes: Below estimate by 0.13 percent or $1.0 million
All other taxes: Above estimate by 7.40 percent or $78.2 million
Individual tax performance compared to February 2024:
Sales Taxes: Up 5.73 percent or $58.8 million
Corporate Taxes (Franchise & Excise): Down 33.58 percent or $21.0 million
Fuel Taxes: Up 3.26 percent or $3.0 million
All other taxes: Up 3.09 percent or $4.5 million
Individual tax performance compared to August 2023 through February 2024:
Sales Taxes: Up 5.61 percent or $453.2 million
Corporate Taxes (Franchise & Excise): Down 23.48 percent or $439.3 million
Fuel Taxes: Up 1.01 percent or $7.6 million
All other taxes: Up 2.79 percent or $30.8 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 at https://www.tn.gov/content/tn/finance/fa/fa-budget-information/fa-budget-rev.html.
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.