(The Center Square) – Tennessee fell $39.4 million short of its budgeted estimate for tax and fee collections in August to begin the new fiscal year.
The $1.5 billion in collections were also $1.7 million less than August 2022 collections.
Tennessee Finance and Administration Commissioner Jim Bryson said several factors influenced the lower collections, including high interest rates lowering the transfer and realty mortgage tax collections.
“As anticipated, August revenues were slightly lower than budgeted estimates but were generally level with receipts received in August 2022,” Bryson said. “Sales and use tax revenues, reflecting consumer activity from the month of July, outperformed estimates and continue to reflect strong growth for the state. Corporate tax revenues for August, a small collection month, were lower than estimated due to a $15 million one-time tax refund and lower quarterly estimated payments.
The largest and strongest part of the collections remained sales tax, which were $25.4 million more than estimated and $36.4 million more than August 2022 collections.
Franchise and excise taxes were $47.8 million less than budgeted.
“While the start of this fiscal year is proving to be a challenge, we remain cautiously optimistic and will continue to monitor economic activity and revenue trends as they develop,” Bryson said.
Tennessee finished $2.5 billion ahead of last fiscal year’s original budgeted estimates but fell $252 million below the revised budgeted totals used in this year’s budget.
