Arkansas tax revenue slows in March

Arkansans are possibly drinking more, gambling more and smoking less, based on tax collections related to those so-called vices.

Total Arkansas tax collections during March were up just 0.6%, with fiscal year-to-date (July 2012-March 2013) revenue totaling $4.332 billion, up 4.7% from the same period in 2012.

The Arkansas Department of Finance & Administration reported Tuesday (April 2) that March revenue was $511.3 million, up $3.1 million compared to March 2012, but 2.1% below the budget forecast.

“Results were mainly driven by the combination of rebound in income tax refunds this month and collections below forecast and below year ago levels in the two largest sources of general revenue,” John Shelnutt, head of the Department of Finance and Administration’s Economic Analysis & Tax Research division, said in the report.

The two largest revenue sources are individual income tax collections and sales and use tax collections.

Year-to-date individual income tax collections total $2.089 billion, or 6.1% higher than the 2012 period. The revenues were 3.1% above forecast. Individual income tax collections during March were $219 million, down 1.3% compared to 2012.

Sales and use tax collections for the fiscal year total $1.582 billion, up just 0.6%, and 1.3% below forecast. The sales and use tax collections during March hit $170.5 million, down 1.2% compared to 2012.

The income tax refunds for the first nine months of the fiscal year total $321.5 million, down 5.6% – or $19.1 million – compared to the prior-year period, and 9.8% below forecast.

During March, the refunds totaled $110.7 million, up 10% compared to March 2012, and up 5.1% above forecast.

“The gains follow filing delays at the IRS and among states early in the tax filing season and limited rebound in February for Arkansas filings. Amounts below forecast for refunds contribute to gains in net available funds. In March, this rebound detracted from net available funds,” Shelnut noted his report.

Year-to-date corporate income taxes totaled $296.8 million, up just 1% from the 2012 year-to-date last year.

OTHER TAX COLLECTIONS
Alcoholic beverage
July 2012 – March 2013: $36.5 million
July 2011 – March 2012: $35.7 million

Games of skill
July 2012 – March 2013: $25.4 million
July 2011 – March 2012: $19.3 million

Tobacco
July 2012 – March 2013: $167.9 million
July 2011 – March 2012: $179 million

Insurance
July 2012 – March 2013: $63.4 million
July 2011 – March 2012: $64 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.