Tennessee has collected nearly $1.2 billion more than budgeted in revenue so far this fiscal year, according to numbers released Monday from Department of Finance and Administration Commissioner Butch Eley.
The revenue collections mainly come from state taxes, such as sales and corporate tax, along with fees.
Tennessee collected $1.4 billion in revenue in November; nearly 22% higher than what was collected in November 2020.
The Tennessee State Funding Board determines revenue estimates and can adjust the estimates during the fiscal year. Additional funds brought in by the state can be appropriated to state projects, which is what happened with the recent special session to approve $884 million in incentives for Ford’s $5.6 billion electric truck development in west Tennessee.
Tennessee beat its initial budgeted estimates by $3.1 billion last fiscal year and beat its revised estimates by $2.1 billion, according to Sycamore Institute.
September has represented the largest overage of tax collections compared with estimates this year at $378 million more than estimated.
“We continue to be encouraged by the strong sales and corporate tax growth exhibited in the month of November,” Eley said. “Sales tax receipt growth, which represents taxable sales activity in October, remained elevated for the month even as the state begins to compare similar collections that were higher in the past year due to recently enacted internet and remote sales tax laws. All other taxes, taken as a group, exceeded the November estimate as well.
“While the economic progress and revenue growth the state has experienced year-to-date has been remarkable, we remain concerned over the sustainability of such high growth rates and will continue to monitor economic activity and revenue trends to ensure fiscal stability.”
Tennessee collected $182.3 million more than estimated in sales taxes during November, while the general fund collected $266.4 million more than estimated.
The state has collected $1.189 billion more than estimated through four months on the fiscal year, on an accrual basis, with $1.112 billion more in the general fund and $77 million more than estimated in four other funds that receive sales taxes.
Franchise and excise taxes were $81.8 million more than estimated for the month and are $401.4 million more than estimated for the fiscal year.
Gasoline and motor fuel taxes were $4 million more than the budgeted estimate of $101.1 million and are $14.1 million more than estimated for the year.
Other totals collected that beat estimates were: tobacco tax ($1.8 million above), privilege tax ($10.7 million above), business tax ($900,000 above) and mixed drink, or liquor-by-the-drink, taxes ($7 million above).
Vehicle registration fees ($900,000 less) were below estimates.