DF&A Report: January Revenues Reverse Trends

Arkansas’ revenue collections reversed recent trends as individual income tax collections slumped and gross receipts saw improvement.

For the month, net available general revenues totaled $460.9 million, up 0.2% above last year and 0.1% above forecast, according to a report released by the Arkansas Department of Finance and Administration (DF&A).

Individual income taxes totaled $310.2 million, down 0.3% compared to one year ago and 0.7% above forecast. During the past year, personal income taxes — a barometer of worker and wage health — have held steady with gains over the previous year.

Gross receipts — which include sales and use taxes, a gauge of consumer spending — were strong in December.  Total collections topped $182.5 million, up 4.9% from last December and 2% above forecast.

Gross receipts in January reflect December sales due to the timing of sales tax reports. The increase in collections suggests good news for Arkansas retailers during the recent holiday sales period.

Corporate income taxes, which are more volatile, were up 125% above last year’s levels at $26.1 million. Corporate taxes were 121.5% above forecast for the month.

Year-to-date, net available general revenues topped $2.8 billion, 2.9% above year ago levels and 1.6% above forecast.

For the first seven months of the state’s fiscal year, overall tax collections remain ahead of schedule in individual and corporate income taxes, but behind forecast in the sales tax arena.

“The sales tax results improved in January relative to forecast, but year-to-date results reflect a combination of generally weak retail sales earlier in the fiscal year and adverse one-time comparisons in business transactions in the first two months of the fiscal year,” the DF&A report noted.