Year-to-date Arkansas tax revenue continues to trend above expectations even with a March revenue report that was 0.5% below the forecast. Much of the dip in March was tied to income tax refunds that were almost $15 million more than expected.
Gross tax revenue for the first nine months (July 2017-March 2018) of the state’s fiscal year was $4.751 billion, up $159.2 million compared with the same period in the previous fiscal year and 0.7% above forecast, according to figures posted Tuesday (April 3) by the Arkansas Department of Finance and Administration (DFA).
Net available revenue is above forecast by $69.6 million.
Individual income tax revenue for the fiscal year-to-date is $2.322 billion, up 5.2% compared with the previous period and 1.9% above forecast. Income tax refunds year-to-date total $289.4 million, up 10.1% compared with the same period in the previous fiscal year.
REFUNDS RETURNING TO NORMAL
John Shelnutt, the DFA director of economic analysis and tax research, said the $16.7 million jump in income tax refunds during March reflects a return to normal following Internal Revenue Service processing delays.
“The main factor for the month is the ‘catchup’ in individual refunds issued in March. It was $14.7 million above forecast for the month but really represents a return to expectations for the income tax filing season. Recall that we were $23 million below forecast YTD in (February) for these refunds,” Shelnutt told Talk Business & Politics.
In addition to IRS processing issues that delayed the start of the tax filing period, Shelnutt said the IRS was also delayed in issuing “determination letters on ‘extenders’ in the Federal Tax cut bill for tax exemptions that were due to expire at the end of (tax year) 2016.” He said the extender delays ran into February.
“Overall, we feel good about the $69.6 million above forecast YTD with three months to go in FY 2018. We will continue to watch the income tax filing season for volatility and departures from expectations. April is the largest collection month of the year and one of the three largest months for refunds,” Shelnutt said.
Year-to-date sales and use tax revenue was $1.796 billion, up 2.5% compared with the previous cycle but 0.4% below forecast. Shelnutt said motor vehicle sales tax revenue was down 6%.
Corporate income taxes for the year are $247.2 million, down $6.5 million from the previous year and 5.1% below forecast.
Gross general revenue collected in March totaled $518.5 million, up 1.6% compared with March 2017 but 0.5% below the forecast.
Individual income tax revenue in March was $250.2 million, up 4.2% compared with March 2017 but 0.4% below the forecast. Individual withholding tax revenue – an indicator of job and wage growth – was up 3.2% compared to March 2017.
Sales and use tax revenue during the month was $200 million, up 3.3% compared with March 2017 but 2% below the forecast. Corporate income tax revenue was $17.4 million, down 36.8% compared with March 2018 and 2.6% below the forecast.
OTHER TAX REVENUE SOURCES
July-March 2018: $41.1 million
July-March 2017: $40.2 million
Games of skill
July-March 2018: $46.4 million
July-March 2017: $43.1 million
July-March 2018: $164.7 million
July-March 2017: $162.3 million
July-March 2018: $61.5 million
July-March 2017: $61.3 million