NASHVILLE – Growth in Tennessee sales tax collections slowed in February to the lowest point in a year, but the state’s revenues in February nonetheless came out $20 million above projections for a total of $818.2 million.
While comparatively slight, the unexpected $20 million in revenues still helped nudge Tennessee’s total budget surplus for the first seven months of the 2015-2016 fiscal year to $439 million, Finance Commissioner Larry Martin announced Friday.
The general fund, which fuels most functions of state government from public schools to economic development, has exceeded estimates for this fiscal year by $407.1 million.
Sales tax collections rose 3.6 percent over a year ago during February, or $8.6 million more than estimates. For the first seven months of the fiscal year, state tax revenues are $226.2 million higher than estimated. The year-to-date growth rate was 6.96 percent.
Four other funds, including transportation, have exceeded projections by $31.9 million during the same period.
“February’s sales tax growth rate was the lowest we’ve seen in the past year, but receipts still managed to come in a little over the budgeted estimate,” Martin said in a news release.
Martin said the state’s franchise and excise taxes on businesses “recorded negative growth for the month, but were marginally higher than the budgeted estimate for the month.”
Martin noted that “typically, more than half of our annual corporate revenues are realized in the months of April through June, so we’ll be watching corporate taxes closely through the remainder of the fiscal year.”
On an accrual accounting basis, February is the seventh month in the 2015-2016 fiscal year.
General fund revenues in February exceeded budgeted estimates in the amount of $11.8 million while the four other funds that share in state tax revenues were $8.2 million more than projections.
Franchise and excise taxes combined were just $200,000 higher than the budgeted estimate in February, and the growth rate over the same month last year fell .84 percent.
Year-to-date franchise and excise collections exceeded estimates by $141.1 million 1.41 percent. However, adjusting for an unexpected one-time payment received last year, the underlying growth rate was 19.55 percent.
Gasoline and motor fuel revenues for February increased by 3.58 percent compared to last year and were $5.2 million more than the budgeted estimate of $67.5 million. They’ve exceeded estimates year to date by $19.9 million.
Tobacco taxes dipped slightly and were $800,000 less than the February budgeted estimate of $19.5 million. Year-to-date, tobacco sales are generating $8.4 million more than expected.
Inheritance and estate taxes were $1.2 million more than the February estimate. On a year-to-date basis revenues are $9.3 million more than the budgeted estimate.
Privilege taxes were $2.3 million more than the February estimate, and on a year-to-date basis, August through February, revenues are $14.9 million more than the estimate.
Business taxes were $2.3 million more than the February estimate. For seven months revenues are $2.9 million more than the budgeted estimate.
Contact Andy Sher at asher@timesfreepress.com.