Arkansas Tax Coffers Still Overflowing In Q1, Sales And Use Tax Collections Jump 8%

Arkansas revenue collections hit a minor blip in September as general tax revenues were slightly below a year ago, but Arkansas is still in good stead with tax coffers up more than $15.1 million or 3% above forecast, state revenue officials said.

For the month of September, which ends the first quarter of fiscal 2016, net available general revenues came in a $516.0 million, $4.7 million or -0.9% percent below last year. September results were well ahead of forecast in sales and use tax and corporate income tax, while lower than expected refunds also boosted net available funds. On the other hand, individual income tax collections were marginally below forecast.

Year-to-date net available general revenues totaled $1.33 billion, $14.4 million or 1.1% above year ago levels. After three months into the fiscal year, net available revenue is above forecast by $49.9 million or 3.9%.

“The month and the (first) quarter both look good,” said economist John Shelnutt, director of DF&A’s Economic Analysis & Tax Research division.

Shelnutt noted that the continued strength in sales and use tax collections in Arkansas has been very prominent in the revenue numbers over that past six months. He also said that Arkansas consumers have benefitted from low gasoline and energy prices, and strong job growth in a number of major sectors.

“We can always turnaround and go the other way with problems in the national economy,” Shelnutt said, citing stock market turmoil and interest rate trepidations. “But I think we are still accelerating in the (post-recession) recovery.”

Among major contributors in September, sales tax growth jumped 8% above year ago collections and $11.1 million over forecast. Corporate Income tax collections also added $5.4 million to the amount above forecast.

Individual Income tax collections were down -8.9% below year ago collections or $4.2 million below forecast, partly attributable to payroll timing effects in the Withholding tax category. Estimated payments were above forecast in both individual and corporate income tax.

Among smaller revenue sources, tobacco was slightly above forecast and moderately above year ago collections. Results in Gaming revenue exceeded forecast and continued to display double-digit growth over year ago revenue.

YEAR-TO-DATE
The following is a breakdown of year-to-date totals in major categories. The state’s fiscal year 2016 began on July 1, 2015.

Year-to-date net available general revenues total $1.336 billion, $14.4 million or 1.1% above year ago levels. After three months into the fiscal year, net available revenue is above forecast by $49.9 million or 3.9%.

Year-to-date Gross General Revenues:

Year-to-date gross collections total $1,521.9 million, representing an increase of $8.7 million or 0.6 percent above last year. Gross general revenues are above forecast by $40.7 million or 2.7%.

Individual Income Taxes:

Year-to-date individual income tax collections total $681.4 million, $32.3 million or -4.5% below fiscal 2015 collections and $8.1 million or 1.2% above forecast.

Year-to-date individual income tax refunds total $19.9 million, down $4.5 million or -18.4 percent compared to last year and $5.8 million or -22.4 percent below forecast. Amounts below forecast in refund categories increase net available revenue results.

Sales and Use Tax Collections:

On a year-to-date basis, sales and use taxes total $596.1 million, an increase of $38.8 million or 7% from a year ago and $27.7 million or 4.9% above forecast.

Corporate Income Taxes:

Year-to-date corporate revenues total $106.6 million, an increase of $3.4 million or 3.3% from year-to-date fiscal 2015. Corporate income is below forecast by $2.5 million or -2.3%. Year-to-date corporate income tax refunds total $4.5 million, a decrease of $0.2 million compared to the same year-to-date period last year.