Despite a fiscal year-to-date decline in individual income tax collections, Arkansas’ largest source of tax revenue, gross tax revenue for the fiscal year is up 0.6% and the state is on track to be able to fully fund the budget. However, May gross revenue fell 4% compared to May 2013.
Year-to-date gross revenue (July 2013-May 2014) totaled $5.626 billion, just 0.6% above the same period last year and above forecast by 0.3%, 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 $2.824 billion, down 1.2% from last year and just 0.4% above the budget forecast. Year-to-date sales and use tax collections were $1.993 billion, up 2.7% above last year but 1.2% 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.
Corporate income tax collections for the first 11 reporting months of the fiscal year totaled $374.2 million, up 4.1% compared to last year and 5% above forecast.
May gross revenue was $425.3 million, down 4% from last year and 6.2% below forecast.
John Shelnutt, head of the Department of Finance and Administration’s Economic (DFA) Analysis & Tax Research division, said a shift in corporate income tax collections altered the May results, but said the revenue is expected to meet state budget needs.
“Results in May reflect a shift of approximately $20 million in Corporate Income tax collections previously reported in April but normally expected in filings for May. This one-month shift boosted April results at the expense of May while year-to-date results now reflect a more realistic look at performance with one month remaining in the fiscal year. The budget is on track to be fully funded,” Shelnutt noted in his report.
Individual income tax collections during May totaled $203.6 million, up 1.2% compared to May 2013 and below forecast by 1.7%.
Sales and use tax collections during the month totaled $180.7 million, down 1.8% from last year and 5.2% 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.
OTHER TAX COLLECTIONS
May 2013 – May 2014: $47.1 million
May 2012 – May 2013: $46.6 million
Games of skill
May 2013 – May 2014: $35.9 million
May 2012 – May 2012: $32.6 million
May 2013 – May 2014: $201.2 million
May 2012 – May 2013: $209.5 million
May 2013 – May 2014: $68.6 million
May 2012 – May 2013: $65.1 million
Tax collections during fiscal year 2013 (May 2012-May 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 May 2010-May 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.