September Net Revenues Up Despite Lagging Sales Taxes

September net revenues climbed higher for the state thanks to strong individual income tax collections, while sales and use taxes struggled for the second consecutive month. Corporate income taxes were also lower.

September was expected to see a boost in sales tax collections as the month’s report would reflect the state’s new back-to-school sales tax holiday activity.

For the month, September sales and use tax collections totaled $177.8 million, a decrease of $1.2 million or 0.7 percent from last year. Collections were below monthly forecast levels by $7.2 million or 3.9 percent.

In August, sales and use tax collections were down 1.5 percent from the previous year and were off forecast by 5 percent. Arkansas Department of Finance and Administration officials said the drop-off may have been a result of postponed purchases in the month of July for the August sales tax holiday. Retailers report sales tax collections in the month following actual sales.

Overall, September net available general revenues topped $494.7 million, $31.9 million or 6.9 percent above last year and $29.9 million or 6.4 percent above forecast.

Individual income taxes for the month were $275.5 million, a 15.4 percent jump from last year and 12.1 percent above expectations.

Corporate income taxes were $66.1 million, a 7.8 percent decline from last September and 1.6 percent below forecast.

With a full quarter of activity in the state’s fiscal calendar, year-to-date net available general revenues topped $1.267 billion, $54.1 million or 4.5 percent above year ago levels and $42.1 million or 3.4 percent above forecast.

You can access the full report here.