Arkansas January tax collections exceed forecast, yearly revenues top $3.1 billion

Arkansas tax collections in January for both gross and net available revenue came in well above year-ago levels as results exceeded forecast in all major categories, and were further boosted by income tax refunds coming in below expected levels, the state’s fiscal office reported Tuesday, Feb. 2.

January net available general revenue totaled $551.9 million, $30.6 million or 5.9% above last year and $31 million or 5.9% above forecast. Seven months into the fiscal year that began in July, Arkansas’ year-to-date net available general revenues total $3.13 billion, which is $12.9 million or 0.4% above year ago levels and above forecast by $97.8 million or 3.2%.

John Shelnutt, director of economic analysis and tax research for the state Department of Finance and Administration (DFA), said the robust growth in January came primarily from healthy sales and use tax collections and a strong double digit growth in corporate income taxes. Individual income tax refunds for the month also saw a huge decline, which actually boosts revenues as refund amounts below forecast add to net available fund results.

Shelnutt said state tax coffers also benefitted from a one-time $6.4 million payment from the state Securities Department, which is collects licensing fees related to the state’s mortgage industry.

“We expected that payment to come in last month, but it showed up (on the books) this month,” he said.

Overall, Arkansas’ year-to-date gross collections continued on a steady path at $3.63 billion, representing an increase of $18.3 million or 0.5% above last year. Gross general revenues are above forecast by $103.6 million or 2.9%. Yearly sales and use taxes total $1.35 billion, an increase of $55.2 million or 4.2% from a year ago and $29.4 million or 2.2% above forecast, state tax officials said.

January collections total $628 million, an increase of $12.2 million or 2% above last year and $18.3 million or 3% above forecast. January individual income tax collection came in at $354.2 million, a decline of $2 million, down 0.6% compared to last year. With respect to the forecast, collections were $4.9 million or 1.4% above forecast. Monthly individual income tax refunds totaled $17.3 million, $17.6 million below last year and $10.7 million below forecast.

Sales and use tax collections for the month jumped to $197.6 million, an increase of $4.4 million or 2.3% above last year. Collections were above January forecast levels by $600,000 or 0.3%. The results largely reflect taxable sales activity in December, DFA officials said.

January corporate income collections total $39.8 million, an increase of $6.3 million from year ago, and $7.3 million or 22.4% above forecast. The gain occurred mainly in estimated payments. Monthly corporate income tax refunds total $3.8 million, which is about $600,000 below year ago levels and $700,000 below forecast.

January tobacco tax collections, a smaller component of general revenue in annual terms, total $17.1 million. Collections increased by $600,000 or 3.9% from year earlier levels and were above forecast by $600,000. Monthly changes in tobacco tax collections can be attributed to uneven patterns of stamp sales to wholesale purchasers.

For the year, individual income tax collections total $1.71 billion, $46.6 million, down 2.7% from a year ago and $41.9 million or 2.5% above forecast. Arkansas taxpayers have collection nearly $71.9 million in income tax refunds total $71.9 million, down $14.3 million, down 16.6% compared to last year, and $10.1 million, down 12.3% below forecast. Amounts below forecast in refund categories add to net available revenue results.

OTHER TAX REVENUE SOURCES
Alcoholic beverage
July-Jan. 2016: $31.2 million
July-Oct. 2015: $30.9 million

Games of skill
July-Jan. 2016: $30.4 million
July-Oct. 2015: $20.4 million

Tobacco
July-Jan. 2016: $130.2 million
July-Jan. 2015: $129.9 million

Insurance
July-Jan. 2016: $44.8 million
July-Jan. 2015: $45.6 million