Income Tax Collections Overpower Consumer Spending Shortfall From Storm
by February 4, 2013 10:23 am 161 views
Strong individual income tax collections in January more than offset sputtering consumer spending as Arkansas’ January revenue summary showed a 12% gain over the previous year. State officials said December’s winter storms were partially to blame.
January net available general revenues totaled $516.1 million, up 12% from last year and 13.5% above forecast.
Individual income taxes totaled $341.4 million, a 10.1% increase from last January and 15.9% above forecast. Corporate taxes rose 6.7% to $27.9 million, 2.5% above predictions.
However sales and use taxes struggled. January collections were down 1% to $178.3 million, a solid 5% below forecast.
“Results were mainly driven by Individual Income tax collections which grew 10.1 percent compared to last year,” said John Shelnutt, head of DF&A’s Economic Analysis and Tax Research division. “Although payroll timing shifts were negative this month for withholding results, the gain of over 52 percent in individual estimated payments accounted for the overall gain in the category and total collections. The tax strategy of income shifting into tax year 2012 to avoid higher tax rates accounted for much of this surge.”
“Sales and use taxes were down compared to last year by -1.0 percent and underperformed the forecast by -5.0 percent,” Shelnutt noted. “Storm-related effects in December would be counted in January collections, along with portions of the holiday shopping season.”
In late December, winter storms pounded parts of Arkansas, particularly central Arkansas during the last week of the year. Sales tax collections reported in January reflect December spending.
Year-to-date net available general revenues topped $2.94 billion, a 5.2% increase from a year ago and 2.9% above forecast.
Other revenue collections in January include:
- Alcoholic beverage tax – $4.6 million, up 2.6%
- Tobacco tax – $15.2 million, down 7.9%
- Racing – $300,000, down 9.2%
- Games of skill – $2.8 million, up 30.9%
You can access the full report here.