February State Revenues Miss Forecast

February’s net revenues missed the mark for the state of Arkansas as sales taxes declined, individual income tax refunds grew, and a timing issue affected payroll collections.

The Arkansas Department of Finance and Administration reported net available general revenues for the month of $212.2 million, one percent above last year, but 2.2% below forecast.

DF&A reported that results were significantly impacted by:

1) A decline in Sales and Use tax compared to year ago and versus forecast;
2) Higher-than expected growth in individual refunds due in part to delayed start of the tax filing season in January; and
3) A positive contribution from temporary effects of payroll timing for Individual Withholding tax.

“Sales and Use tax collections in February largely reflect economic activity in January. Weather effects on collections were noted in the retail sector,” said Dr. John Shelnutt, head of DF&A’s division of economic analysis and tax research. “Among other revenue categories, corporate income tax was below year ago and forecast in an otherwise low-activity month and tobacco tax collections were down sharply.”

On a year-to-date basis, net available general revenues stood at $3.211 billion, up 1.7% above last year’s levels and 1.1% above forecast.

• Year-to-date Individual Income Taxes: YTD individual income tax collections totaled $1.907 billion, two percent above FY 2013 collections and 1.1 percent above forecast. 
• Year-to-date Sales and Use Tax Collections: YTD sales and use taxes total $1.446 billion, an increase of 2.4 percent from FY 2013 but down 1.6 percent below forecast.
• Year-to-date Corporate Income Taxes: YTD corporate revenues total $240 million, an increase of 5.7 percent from year-to-date FY 2013. Corporate income is above forecast by 4.5 percent.