Overall Arkansas tax revenue is above forecast for the first nine months of the fiscal year, with sales and use tax collections – an indicator of consumer spending – continues to miss budget forecasts. However, March sales and use tax revenue was up more than 7%.
Year-to-date gross revenue (July 2013-March 2014) totaled $4.456 billion, 2.9% above the same period last year and above forecast by 1.1%, according to the report issued Tuesday (April 4) by the Arkansas Department of Finance and Administration.
Collections have declined relative to how the fiscal year began. The gross collections were up 3.4% after the first six months of the fiscal year, and 0.9% above forecast. After the first four months of the fiscal year, the gross revenue was up 4.1%.
Individual income tax collections for the fiscal year totaled $2.154 billion, up 3.1% from last year and 2.1% above the budget forecast. Year-to-date sales and use tax collections were $1.629 billion, up 3% above last year and 1% below the budget forecast. The sales and use tax collections were up 4.8% four months into the fiscal year and up 3.9% six months into the fiscal year. Income taxes and the sales and use tax collections are the two primary sources of state revenue.
The corporate income tax collections for the first eight reporting months of the fiscal year totaled $305.8 million, up 3% compared to last year and 4.5% above forecast.
March gross revenue was $546.4 million, up 6.9% above last year and 5.8% below forecast.
John Shelnutt, head of the Department of Finance and Administration’s Economic (DFA) Analysis & Tax Research division, provided this analysis of the March numbers: “All major categories of collections were above forecast in gross revenue terms and lower-than expected refunds provided an extra gain in net available funds. The monthly swing largely offsets the weakness in the prior month and adds to year-to-date gains going into the largest, and potentially volatile collection month of April.
“Results were significantly impacted by: 1) rebound in Sales and Use tax compared to year ago and versus forecast, 2) components of Individual Income tax compared to forecast, and 3) a decline in both individual and corporate refunds compared to forecast and year ago refunds.
“Among smaller revenue categories, most categories exceeded forecast except Tobacco tax collections were down sharply.”
Individual income tax collections during March totaled $246.6 million, up 12.6% compared to March 2013 and above forecast by 9.9%.
Sales and use tax collections during the month totaled $183.1 million, up 7.4% from last year and 3.7% below the forecast. Sales and use tax collections, considered a barometer of consumer confidence, ended fiscal year 2013 on a down note. Collections in the segment for the fiscal year totaled $2.124 billion, up just 1.1% compared to the 2012 period, and 1.4% below forecast.
The DFA in early December updated the projections for 2014 and 2015 fiscal year revenue. Gross general revenues are estimated at $6.203 billion for the current fiscal year (July 1, 2013-June 30, 2014), down about 0.2% from fiscal 2013 collections.
The revenue forecast for fiscal year 2015 is $6.333 billion, up just 2.1% above the 2014 estimate. The 2015 estimate includes an anticipated reduction of $85.2 million from tax cuts approved in the 2013 Legislative Session.
OTHER TAX COLLECTIONS
July 2013 – March 2014: $37.6 million
July 2012 – March 2013: $36.5 million
Games of skill
July 2013 – March 2014: $28.6 million
July 2012 – March 2012: $25.4 million
July 2013 – March 2014: $162.5 million
July 2012 – March 2013: $167.9 million
July 2013 – March 2014: $66.3 million
July 2012 – March 2013: $63.4 million
Tax collections during fiscal year 2013 (July 2012-June 2013) totaled $6.214 billion, up 4.9% above the previous fiscal year and up 2.5% compared to budget estimates. One result of the gains was a budget surplus of $299.5 million.
Fiscal year 2013 marked the third consecutive year of year-over-year gains. Arkansas tax collections reversed a negative two-year slide in the 2011 fiscal year, with collections up 4.5% in the July 2010-June 2011 period.
State tax collections for fiscal year 2011 totaled $5.673 billion, up 4.5% above the $5.43 billion in the 2010 period.
The biggest declines in the 2009 and 2010 fiscal years were with individual income tax collections and sales and use tax collections.