Sales Tax Collections In March Down 6%

The state’s first sales tax collections during the COVID-19 outbreak showed a six percent decline.

The April tax report released Tuesday shows March collections, including just a few days of a state shutdown. Overall, Tennessee tax collections were off by some $822 million from a year ago. Some of that number the results of tax filing extensions given to businesses and individuals.

“April’s numbers were disheartening and we have a very difficult financial period ahead of us with which to make real hard decisions,” Governor Bill Lee said.

“It is not even a full month of what we have now seen,” Department of Finance and Administration Commissioner Butch Eley said.

Eley said the silver lining, so far, was that the six percent sales tax decline can be offset by sales tax revenue earlier in the fiscal year that had surpassed budget by some six percent. He said the work the legislature did in March to reduce spending for the new fiscal year will be a good start. The two houses reduced spending by better than $800 million in that work.

“We’re in better shape now than we would have been,” Eley said.

Lee said the April reporting gives the state and its economists another data point to project forward.

“Every time we get a little more information or a little more data we have a little more understanding of what we think the future holds,” Lee said. “It’s going to be very difficult, there’s no doubt about that.”