Arkansas’ tax revenue up 3.3% in first 10 months of fiscal year

Arkansas tax collections are up $172 million during the first 10 months of the fiscal year. That 3.3% gain over the same period in the previous fiscal year comes courtesy of slightly better than expected income tax revenue and smaller tax refunds.

Gross revenue between July 2014 and April was $5.379 billion, up 3.3% compared to the same period in the previous fiscal year. The amount is also 2.5% above the budget forecast, according to the report issued Monday (May 4) by the Arkansas Department of Finance and Administration.

Individual income tax collections for the first 10 months of the fiscal year totaled $2.71 billion, up 3.4% from last year and 1.8% above the budget forecast. Year-to-date sales and use tax collections were $1.849 billion, up 2.1% compared to last year and 1% above the budget forecast. Income taxes and the sales and use tax collections are the two primary sources of state revenue.

Year-to-date income tax refunds total $460.8 million, which is up 2% compared to last year but 3% below the forecast.

Corporate income tax revenue for the first 10 months is $404.1 million, up 10.1% compared to the same period in the previous fiscal year, and up 16.8% over the budget forecast.

STRONG APRIL COLLECTIONS
Revenue reported in the April report was $80.2 million, up 7.6% compared compared to April 2014, and up 10.1% above the forecast.

“Results in April, the largest collection month of the year, were above forecast in all major categories of gross collections. In addition, refunds in both Individual and Corporate Income tax were less than expected,” according to John Shelnutt, head of the Department of Finance and Administration’s Economic (DFA) Analysis & Tax Research division. “Individual Income tax collections contributed $41.9 million above forecast in April, as tax filings with payments grew by double-digit amounts compared to the prior year. The gain was partly offset by a decrease in Withholding tax, reflecting the shifts in payroll withholding rates identified in recent months.”

Individual income tax revenue in April was $510.1 million, up 9.3% compared to April 2014 and up 8.9% over the budget forecast. Sales and use tax revenue during the month was $190 million, up 4% and up 3% over the budget forecast.

Shelnutt said the sales and use tax gain was “part of a rebound effect from weather-related declines in the prior month.”

OTHER TAX COLLECTIONS
Alcoholic beverage
July 2014 – April 2015: $43.1 million
July 2013 – April 2014: $41.9 million

Games of skill
July 2014 – April 2015: $38.2 million
July 2013 – April 2014: $32.5 million

Tobacco
July 2014 – April 2015: $182 million
July 2013 – April 2014: $181.7 million

Insurance
July 2014 – April 2015: $67.4 million
July 2013 – April 2014: $67.3 million

COLLECTIONS HISTORY

Tax collections during fiscal year 2014 (July 2013-June 2014) totaled $6.242 billion, up 0.5% above the previous fiscal year and up just 0.2% compared to budget estimates. The year marked the fourth consecutive year of revenue increases. The fiscal year ended with a budget surplus of $78.7 million.

Tax collections during fiscal year 2013 (January 2012-January 2013) totaled $6.214 billion, up 4.9% above the previous fiscal year and up 2.5% compared to budget estimates. One result of the gains was a budget surplus of $299.5 million.

Arkansas tax collections reversed a negative two-year slide in the 2011 fiscal year, with collections up 4.5% in the January 2010-January 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.

The biggest declines in the 2009 and 2010 fiscal years were with individual income tax collections and sales and use tax collections.