NASHVILLE – Significant corporate tax refund requests led to a decrease in franchise and excise tax collections for October, putting collections at $703.5 million, or 6.42% less than October 2006 collections.
“Unusually large refund requests by corporate taxpayers for overpayments in the 2007 fiscal year made F&E collections weaker than expected,” Department of Revenue Commissioner Reagan Farr said. “The significant outflow of refunds may be an early sign of a softening economy and less robust revenue collections.”
“Continuing to be conservative is critical as we begin to navigate what appears to be a softening economy,” said Finance & Administration Commissioner Dave Goetz.
On an accrual basis, October is the third month in the 2007-2008 fiscal year.
October collections were $100.0 million less than the budgeted estimate. The general fund was under collected by $102.4 million and the four other funds were over collected by $2.4 million.
Sales tax collections were $16.5 million less than the estimate for October. The October growth rate was 1.84 %.
Franchise and excise taxes combined were a negative $58.7 million and were $75.7 million below the budgeted estimate of $17.0 million.
Gasoline and motor fuel collections increased by 2.45 % and they were $3.5 million above the budgeted estimate of $72.7 million.
Inheritance taxes were under collected by $.9 million for the month. All other taxes were under collected by a net $10.4 million.
Year-to date collections for three months were $135.9 million less than the budgeted estimate. The general fund was under collected by $145.3 million and the four other funds were over collected by $9.4 million.
The budgeted revenue estimates are based on the State Funding Board’s consensus recommendation adopted by the first session of the 105th General Assembly in June of 2007.