Department of Revenue: State collected $11 billion in FY2025; corporate receipts fell amid expensing and tax changes

The Department of Revenue reported to the Senate Finance Committee that it collected $11,000,000,000 in fiscal year 2025 and remitted about $7,200,000,000 of that to the state general fund.

"At the end of the year, we had collected $11,000,000,000 for the state," said the Agency official representing the Department of Revenue, who gave the committee a two-page highlights sheet and a spreadsheet of historical collections. The presentation showed major transfers to the general fund as well as diversions to education, transportation and local governments.

The presenter identified sales tax and individual income tax as the largest revenue streams. He told senators that while the department recorded nearly $4.3 billion in total sales-tax receipts, roughly $2.8–2.9 billion flowed to the general fund after statutory diversions such as the Education Enhancement Fund.

Corporate income and franchise tax receipts fell to about $735,000,000 in FY2025 from roughly $967,000,000 in FY2024. The Agency official told the committee he believed accelerated depreciation and near-term business expense patterns were important drivers: "I think the expensing cost well over $100,000,000," he said, while cautioning that calendar-year tax-return timing can make fiscal-year comparisons appear anomalous.

Use tax collections also increased but a growing share was diverted to local governments: the presenter said the state collected roughly $949,000,000 in use tax in FY2025 but transferred about $439,900,000 of that to the general fund, with the remainder going to municipalities, counties and education-related diversions.

Committee members pressed for detail on corporate revenue drivers and the mechanics of diversions. The Agency official offered to provide further data and noted that historical spreadsheets (FY2019–FY2025) were included in the handout.

The presenter also updated the committee on operations: the department is building a new ABC warehouse of roughly 300,000 square feet designed to hold double current inventory and to ship up to 8,000,000 cases a year. He said construction is on budget and that the department is working with the Department of Finance and Administration on the project.

He warned the committee that a recent inventory and a transition to a new warehouse-management system, combined with an outdated conveyor control package, created short-term delivery delays: "In that transition coming out of the inventory, we've hit some speed bumps," he said, adding staff and the contractor were working to restore normal service with no precise timeline.

On regulatory duties, the Department noted it published two product registries in October for cigarettes and electronic nicotine delivery systems and is conducting inspections across the state. The presenter said the department had completed roughly 2,600 inspections and found about 2,300 entities compliant, but that the inspection program requires substantial staff time and travel and urged lawmakers not to cut inspection staffing.

The committee accepted the briefing and asked the department to provide additional data on municipal diversions and projections for FY2026 collections.

Next procedural steps: the briefing did not include any committee action; senators requested follow-up materials and analysis from the Department of Revenue.