NASHVILLE – Tennessee Department of Finance and Administration Commissioner Jim Bryson announced Friday that revenues were less than budgeted estimates in October. Tennessee’s tax collections were slightly lower in October than the previous year driven by the three-month grocery tax holiday and lower business tax collections. Overall October revenues were $1.48 billion, which is $50.9 million less than October of last year and $62.1 million less than the budgeted estimate. The growth rate for October was negative 3.33 percent. Sales taxes collected by the state in October reflect September consumer spending.
“October revenues fell short of expectations primarily because of losses in sales tax receipts, reduced corporate tax filings, and depressed realty transfer and realty mortgage tax collections,” Bryson said. “Lower collections from each of these taxes represent concerns we have expressed for some time. The sales tax holiday on groceries decreased state collections. Franchise and excise tax collections were also lower, as more corporate refunds from overpayments were processed during the month. Furthermore, real estate transaction taxes, continue to weaken as interest rates remain high.
“We continue to closely watch the current economic environment and will carefully monitor our revenue and expenditure patterns for the balance of this fiscal year.”
On an accrual basis, October is the third month in the 2023-2024 fiscal year.
Year-to-date revenues for the three months were $108.9 million less than the budgeted estimate. August through October, general fund revenues were $114.7 million less than estimates and the four other funds that share in state tax revenues exceeded estimates by $5.8 million.
The budgeted revenue estimates for 2023-2024 are based upon the State Funding Board’s consensus recommendation from November 28, 2022, and adopted by the first session of the 113th General Assembly in April 2023. Also incorporated in the estimates are any changes in revenue enacted during the 2023 session of the General Assembly. These estimates are available on the state’s website.