Arkansas November Tax Revenues Below Forecast

Individual and corporate income taxes as well as sales tax collections were all lower than forecast in November, but year-to-date net revenues for the state are still 3.5% above last year’s levels and 1.5% above forecast.

Year-to-date net available general revenues totaled $2.043 billion, a $69.6 million bump over last year’s five-month total. Net revenues for the year are above forecast by $29.4 million.

Arkansas Department of Finance and Administration officials said in November that a big swing in the volatile corporate income tax category was a major contributor to the lower numbers.

“Results in November were impacted by swings in Corporate Income tax, a volatile component of general revenue,” said John Shelnutt, head of DF&A’s Economic Analysis & Tax Research division.

“Gross collections in Corporate Income tax were $4.2 million below forecast and -41.6 percent below year ago levels, while Corporate Refunds were $2.6 million above expectations and 36.6 percent above year ago levels. These monthly results differed dramatically from year-to-date results for the same categories,” Shelnutt said. “Other major categories of general revenue were below forecast by lesser amounts. Individual Income was $3.6 million below forecast (-1.8 percent) and Sales and Use Tax was below forecast by $0.8 million (-0.5 percent). Timing effects in collections compared to year ago activity and the Thanksgiving holiday were anticipated as shown in Sales Tax growth compared to last year.”

A breakout of the November revenue categories included:

• November Net Available General Revenues totaled $349.7 million, $0.8 million or -0.2 percent below last year and $8.4 million or -2.3 percent below forecast.
• November Individual Income Tax collections totaled $197.7 million. Collections increased by $5.3 million, or 2.7 percent compared to last year. With respect to the forecast, collections were $3.6 million or -1.8 percent below forecast. Individual withholding increased 4.6 percent compared to last year. November Sales and Use Tax Collections totaled $175.2 million, an increase of $2.0 million or 1.2 percent above last year. Collections were below monthly forecast levels by $0.8 million or -0.5 percent.
• November Corporate Income Tax collections totaled $6.2 million, a decrease of $4.4 million from year ago, and $4.2 million or -40.3 percent below forecast.

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