State tax revenue rises in March report

Boosted by strong tax collections in all major revenue categories and lower-than-expected income tax refunds, Arkansas’ March revenue report reflected a strong month of economic activity.

Net available general revenues – the amount remaining after mandatory allocations – totaled $356.3 million for March, 12.8% above last year’s levels and $13.5% above forecast.

“All major revenue categories came in on forecast or above in March,” noted John Shelnutt, head of the Department of Finance and Administration’s Economic Analysis & Tax Research division.

A breakdown of revenue collections by category during the month included:
• March Individual Income Tax collections totaled $221.8 million. Collections increased by $18.8 million, or 9.2%, compared to last year. With respect to the forecast, collections are $15.5 million or 7.5% above forecast. Individual withholding gained 6.4% compared to last year.

• March Individual Income Tax refunds totaled $100.6 million, $20.2 million below last year and also $20.2 million below forecast. Low growth in refunds followed high growth in the prior month. Less volatility is expected as refunds return to a normal filing period. In March, 15.1 percent fewer refunds were processed than in March 2011 and the average refund amount was 2.5 percent below last year.

• March Gross Receipts collections totaled $174.7 million, an increase of $8.2 million or 5% from last year. Collections were above monthly forecast levels by 1.7%. March gross receipts collections, which include sales and use taxes, reflect collections from retailers and businesses in February 2012.

• March Corporate Income Tax collections totaled $59.7 million, an increase of $1.6 million or 2.8% from year earlier levels, and were equal to forecast levels for the month. Corporate income tax filings are a volatile component of general revenue.

YEAR-TO-DATE
The March report brought year-to-date net available general revenues for the state to $3.347 billion, up $94.7 million, or 2.9% above year ago levels. Nine months into the fiscal year, net available general revenue is above forecast by $62.6 million or 1.9%.

In a Tuesday press conference, Gov. Mike Beebe said he was pleased with the March report, but he urged caution that seasonal variances may be affecting the numbers.

Year-to-date individual income tax collections totaled $1.97 billion, $99.9 million or 5.3% above last year’s collections and $64.8 million or 3.4% above forecast.

Year-to-date corporate revenues totaled $293.8 million, an increase of $37.9 million or 14.8% from year-to-date last year. Corporate income is above forecast by 13.9%.

Year-to-date gross receipts collections totaled $1.59 billion, an increase of $26.1 million or 1.7% from last year and $22.2 million or 1.4% below forecast.