Tennessee revenues exceeded budgeted estimates for the month of May. Department of Finance and Administration Commissioner Jim Bryson reported Friday that total May tax revenues were $1.9 billion, $227.2 million more than the budgeted estimate and $244.7 million more than May 2025. The total tax growth rate for the month was 14.38 percent.

General fund revenues were $221.1 million more than the May estimate, while the four other funds that share in state tax revenues were $6.1 million more than the estimates.

“Tax revenue growth in May exceeded expectations,” Comm.

Bryson said. “An increase in corporate quarterly estimated tax payments and solid sales tax receipts, driven by April taxable sales activity, lifted overall monthly revenues. All other tax categories combined performed near budgeted expectations.

With just two months left in the 2025–2026 fiscal year, we remain optimistic and will continue to monitor the year-end results.”

On a year-to-date basis, August through May, total tax revenues are 2.60 percent greater than the budget estimate, or $482.5 million above expectations. When compared to this same period last year, total tax revenues have grown 6.54 percent or $1.2 billion.

General fund revenues are 2.83 percent greater than the year-to-date budgeted estimate, or $443.2 million higher. Likewise, general fund collections compared to this same period last year have increased 6.38 percent or $966.0 million.

Individual tax performance compared to May 2026 Budgeted Estimates:
- Sales Taxes: Above estimate by 3.11 percent or $39.2 million
- Corporate Taxes (Franchise & Excise): Above estimate by 185.19 percent or $187.7 million
- Fuel Taxes: Below estimates by 0.47 percent or $0.5 million
 - All other taxes: Above estimate by 0.32 percent or $0.8 million

Year-to-date performance compared to Budgeted Estimates:
- Sales Taxes: Above estimate by 1.81 percent or $224.6 million
- Corporate Taxes (Franchise & Excise): Above estimate by 5.35 percent or $169.7 million
- Fuel Taxes: Below estimates by 0.11 percent or $1.2 million
- All other taxes: Above estimate by 4.67 percent or $89.4 million

Individual tax performance compared to May 2025:
- Sales Taxes: Up 3.55 percent or $44.6 million
- Corporate Taxes (Franchise & Excise): Up 162.46 percent or $178.9 million
- Fuel Taxes: Up 1.70 percent or $1.8 million
- All other taxes: Up 8.48 percent or $19.5 million

Individual tax performance compared to August 2024 through May 2025:
- Sales Taxes: Up 4.22 percent or $511.9 million
- Corporate Taxes (Franchise & Excise): Up 18.38 percent or $518.7 million
- Fuel Taxes: Down 0.13 percent or $1.4 million
- All other taxes: Up 7.52 percent or $140.1 million

The budgeted revenue estimates for 2025–2026 are based on the State Funding Board’s consensus recommendation from Nov. 25, 2024, which was adopted by the first session of the 114th General Assembly in May 2025. These estimates also incorporate any revenue changes enacted during the 2025 General Assembly session. Monthly estimates for fiscal year 2025–2026 are available on the state’s website.

On Nov 24, 2025, the State Funding Board reconvened and recommended updated revenue projections for the 2025–2026 fiscal year. The Board adopted revised growth ranges of 1.59 percent to 2.04 percent for total taxes and 0.72 percent to 1.32 percent for general fund revenues. Both the Board’s upper-limit projection and the growth assumptions outlined in Governor Lee’s budget proposal for the second session of the 114th General Assembly reflect no changes to the Department of Revenue’s original state tax revenue estimates for the 2025–2026 fiscal year.

On May 16 during the second session of the 114th General Assembly, the Legislature passed the 2026–2027 budget, incorporating the revised revenue ranges recommended by both the Governor and the Funding Board. The appropriations bill, PC 1142, was signed into law by the Governor on May 22.