The Tennessee Department of Finance and Administration announced the drop of revenue for the state government by 39.75% for the month of April as compared to last year, according to a release.
State revenue for April 2020 was about $1.3 billion, which is $693.8 million less than the state budgeted for.
“The signs of economic downturn due to the COVID-19 pandemic have begun to appear in Tennessee’s April tax receipts,” Department Commissioner Butch Eley said in a release. “It has been 10 years since an economic downturn has impacted state revenues. The state’s large monthly revenue surpluses built up throughout the beginning of the year will now be tested as the pandemic’s impact begins to erase those gains. Yet we remain committed to keeping the state's budget in balance despite the current challenges.”
The drop of revenue for the state can be attributed to a number of different revenue sources, as the general fund revenue was less than budgeted estimates by over $650 million. Within that, the sales tax revenue was $61.2 million less than estimated, and franchise and excise tax revenue was $486 million lower than estimated.
Other tax revenue, such as tobacco, mixed drink, privilege, business and motor vehicle registration taxes, were also millions of dollars less than the state estimated.
“April sales tax revenues, reflecting March taxable sales activity, were weakened as the state began to withdraw from its usual patterns of consumer spending by mid-month,” Eley said in a release. “Franchise and excise tax receipts, along with Hall income and business taxes are also notably reduced due to filing extensions that will allow individuals and businesses to report their taxable activity later in the year.”
The Tennessee Department of Revenue extended the due date for some taxes April 6. Franchise, excise and Hall income taxes originally due April 15 have been pushed back to July 15, while business taxes originally due April 15 have been pushed back to June 15. According to the department, interest and late filing penalties will not be applied to tax returns filed before the extended due date.
“We are committed to helping taxpayers,” Revenue Commissioner David Gerregano said in a release. “We know that taxpayers are doing all they can to meet the current challenges while continuing to comply with state tax requirements. We hope to offer some relief through the extension of these deadlines.”