Image Credit: Tennessee General Assembly
The Center Square [By Kim Jarrett] –
Tennessee’s general fund revenue is $114 million less than estimated and the state’s other tax collections are down by $3.6 million but Finance and Administration Commissioner Jim Bryson said he is optimistic the next three months will be better.
Revenue for all sources is off by $117.6 million when compared to estimates and is $316.9 million less than in April of last year, according to Bryson.
The most significant reduction is in corporate franchise and excise collections, which are $153.2 million below estimate, a 13.2% drop.
“Corporate tax payments were notably lower this year due to tax policy changes that reduced taxpayers’ franchise tax liabilities,” said Gina L. Long, director of communications. “Additionally, many corporate taxpayers are utilizing carryforward tax credits from prior years, and several large, non-recurring payments were included in last year’s collections.”
The General Assembly passed a corporate franchise tax cut in 2024 that was estimated to cost the state $1.6 billion. Corporations started applying for the tax break in May 2024.
Fuel taxes were down 4% in April but were up 5% in March.
“Year-to-date, we’re up nearly 1% and exceeding our estimates by $3 million,” Long said of the fuel taxes.
April is the ninth month of the 2024-2025 fiscal year.
“We are encouraged that sales tax receipts were close to targeted figures and that the state’s business and privilege taxes continue to show promising gains,” Bryson said. “As we continue to closely monitor state finances, we remain committed to maintaining a balanced budget that serves Tennesseans well.”
