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Location: Nashville, Tennessee, United States

4/09/2002

Vindication A month ago, I alleged in a column posted here that State Finance Commissioner Warren Neel was misrepresenting the state's true revenue picture by focusing primarily on the franchise and excise tax, one of only four of the state's 23 taxes of which collections actually dropped in February compared to February 2001.

I wrote, "What Neel doesn't tell you is that F&E taxes are paid quarterly and must be paid by the 15th day of the fourth month after the end of a company's fiscal year. And according to the Tennessee Department of State, most Tennessee businesses use the calendar year as their fiscal year. That means very few businesses actually owe the tax to the state until April 15. At the tail end of a recession, it's not surprising that business owners aren't rushing to send checks to the state two months before they are due."

I also noted how Neel's predecessor John Ferguson had pulled the same deceptive trick last year, only to see F&E revenues soar the following month (as I had predicted in a column written a year ago that was published at Chattanoogan.com).

Well... it appears that while Neel wants to play games and misrepresent facts, state Rep. Matt Kisber is more honest about how Tennessee collects its revenue.

Kisber, chairman of the House Finance Committee, told the Tennessean that, in the Tennessean's words, tax collections to be reported later this month or early in May, particularly franchise and excise taxes, will be pivotal in helping officials make financial projections, including how much revenue to expect and how much they will need to raise."

What isn't clear from the Tennessean is that the revenue figures that will come out in both April and May are crucial. May's data release will include F&E collections in the all-important month of April.

Strong collections could go a long way toward wiping out the alleged 'deficit' for the current fiscal year.