Arkansas’ May tax revenue report is the second consecutive months of more than 4% gains in sales and use tax collections, which is an indication of improving consumer confidence. Overall, tax revenue for the state’s first 11 months of the fiscal year is up 3.1%.
Gross revenue between July 2014 and May was $5.8 billion, up 3.1% compared to the same period in the previous fiscal year, and up 0.3% above the budget forecast, according to the report issued Monday (June 2) by the Arkansas Department of Finance and Administration.
Individual income tax collections for the first 11 months of the fiscal year totaled $2.909 billion, up 3% from last year and 0.9% above the budget forecast. Year-to-date sales and use tax collections were $2.038 billion, up 2.3% compared to last year and 0.3% above the budget forecast. Income taxes and the sales and use tax collections are the two primary sources of state revenue.
Corporate income tax revenue for the first 11 months is $412.8 million, up 10.3% compared to the same period in the previous fiscal year, and up 0.5% over the budget forecast.
Total collections in the May report was $427.5 million, up just 0.5% compared compared to May 2014, and up 3.6% above the forecast.
“Results in May 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. “Sales and Use tax revenue rose 4.4 percent compared to year ago and 3.8 percent above forecast, marking the second consecutive monthly gain of 4.0 percent or better growth.”
Sales and use tax revenue during the month was $188.6 million, up 4.4% and up 3.8% over the budget forecast. In the April report, Shelnutt said the sales and use tax gain was “part of a rebound effect from weather-related declines in the prior month.”
Consumer spending could remain active through the remainder of 2015, according to a consumer sentiment survey released Tuesday by Arvest. Results from the survey indicated that many Arkansans look forward to purchasing a “big ticket” household item during the second half of 2015 as many have seen their personal financial situation improve this year.
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, told The City Wire that unemployment numbers are promising, low interest rates should stay in place for the short term and Arkansans are, generally, responding well to an improving economy.
Individual income tax revenue in May was $198.9 million, down 2.3% compared to May 2014 and up 14.5% over the budget forecast.
OTHER TAX COLLECTIONS
July 2014 – May 2015: $47.9 million
July 2013 – May 2014: $47.1 million
Games of skill
July 2014 – May 2015: $42.6 million
July 2013 – May 2014: $35.9 million
July 2014 – May 2015: $199.6 million
July 2013 – May 2014: $201.2 million
July 2014 – May 2015: $69 million
July 2013 – May 2014: $68.6 million
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.