Tennessee Tax Collections Up, Way Up

Tennessee is largely dependent on the sales tax since the state has no income tax. Credit: Troy B Thompson/Flickr

Tennessee is largely dependent on the sales tax since the state has no income tax. Credit: Troy B Thompson/Flickr

Tennessee continues to bring in more tax money than anyone thought it would. May revenues for state government were up four percent over last year.

Tax collections have grown every month in the last year, but May was a bigger improvement.

Finance Commissioner Larry Martin says people are buying more building material and automobiles, giving a boost to sales tax revenue.

At this point, the state has already taken in nearly $320 million more than it expected. And there are still two months to go in the fiscal year. The collections have been higher than even the most optimistic projections made by state economists in December.

As revenues have been on the rise, the state legislature has continued to cut several taxes. Starting July 1st, the sales tax on food will be reduced again from 5.25 percent to a flat 5 percent.


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