NASHVILLE – Tennessee revenue collections for September continue to reflect the state’s strong economy. Finance and Administration Commissioner Dave Goetz today reported that overall September revenues were $977.4 or 3.35% over September 2005 collections.
The September figure includes the impact of the sales tax holiday held August 4 – 6, 2006. Retailers reported sales figures for August during the month of September, and based on Department of Revenue preliminary projections, Tennesseans avoided $11.1 million in state sales taxes and $3.7 million in local taxes during the three-day period.
“The total impact to the state is $14.8 million, as we made sure local governments didn’t suffer a $3.7 million loss in local option taxes, as the state said it would do when Governor Bredesen proposed the holiday,” Goetz said. “When we factor in the impact of the tax holiday, and account for a $9.4 million non-recurring audit assessment received in September 2005, the underlying growth rate for September 2006 is 7.61%, which we consider to be strong revenue growth.”
On an accrual basis, September is the second month in the 2006-2007 fiscal year.
September collections were $21.2 million less than the budgeted estimate. The general fund was under collected by $23.0 million and the four other funds were over collected by $1.8 million.
Sales tax collections were $11.5 million less than the estimate for September. The September growth rate was 2.98%.
Franchise and excise taxes were $11.6 million below the budgeted estimate of $270.7 million.
Gasoline and motor fuel collections decreased by 3.65% but they were $1.0 million above the budgeted estimate of $71.5 million.
Inheritance taxes were over collected by $200,000 for the month. All other taxes were over collected by a net $1.6 million.
Year-to date collections for two months were $39.6 million less than the budgeted estimate. The general fund was under collected by $41.7 million and the four other funds were over collected by $2.1 million.
The budgeted revenue estimates are based on the State Funding Board’s consensus recommendation adopted by the second session of the 104th General Assembly in May of 2006.