State tax revenue dips in August, up year-to-date

Arkansas tax collections for the first two months of the fiscal year (July 2012-June 2013) total $884.9 million, up 2.6% above the same period in 2011 and up 1.2% above forecasts.

The August revenue report released Wednesday (Sept. 5) continues a positive year-to-date trend that saw the 2012 fiscal year end with a $145.6 million surplus. Arkansas’ gross revenues in fiscal year 2012 totaled $5.924 billion, or 4.4% higher than fiscal year 2011 and 2.2% above forecast.

However, total revenue in August was $423.7 million, down 0.9% compared to August 2011, and 1.3% below forecast.

“Results were mainly driven by a shortfall in sales and use tax collections, with results falling below forecast and year ago levels. Sales and Use taxes were down in all business and consumer-related categories except automobile sales,” noted John Shelnutt, head of the Department of Finance and Administration’s Economic Analysis & Tax Research division. “In addition, some spending for school supplies and clothing in July may have been postponed to take advantage of the sales tax holiday in August. Although, this cannot be determined since businesses are not required to report all sales of property by category.”

THE NUMBERS
Year-to-date (July 2012-Aug. 2012) individual income tax collections totaled $401.8 million, up 4.2% from last year, and 3.5% above forecast.

Year-to-date (July 2012-Aug. 2012) gross receipts collections — primarily sales and use taxes — totaled $335.9 million, down 1.1% from last year, and 4.5% below forecast. The gross receipts tally is an indicator of consumer spending.

Year-to-date corporate income taxes totaled $29.7 million, down 3.1% million from year-to-date last year, and above forecast by 5.9%.

The August individual income tax collections were $189.7 million and gross receipts collections totaled $178 million, down 1.2% and 1.5%, respectively.

OTHER TAX COLLECTIONS
Alcoholic beverage
July 2012 – Aug. 2012: $8.8 million
July 2011 – Aug. 2011: $8.6 million

Games of skill
July 2012 – Aug. 2012: $3.7 million
July 2011 – Aug. 2011: $3.9 million

Tobacco
July 2012 – Aug. 2012: $39.6 million
July 2011 – Aug. 2011: $42.3 million

Insurance

July 2012 – Aug. 2012: $19.6 million

July 2011 – Aug. 2011: $20.1 million

COLLECTIONS HISTORY
Fiscal year 2012 marked the second 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. Total state revenue of $5.43 billion in fiscal year 2010 was 2.4% below the previous fiscal year and marked the second consecutive year of revenue decline.

The biggest declines in the 2009 and 2010 fiscal years were with individual income tax collections and sales and use tax collections.