Arkansas tax revenue continues to beat projections, up 2% in October

Tax revenue in Arkansas’ first four fiscal months (July-October) totaled $2.558 billion, up 13.8% from the same period in 2019 and 12% over the budget forecast. The increase has resulted in $242.6 million in revenue above what was expected.

Tuesday’s (Nov. 3) report from the Arkansas Department of Finance and Administration (DFA) showed individual income tax revenue was $1.269 billion in the first four fiscal months, up 18.3% compared to the same period in 2019 and up 10.7% over the budget forecast. Sales and use tax revenue – an indicator of consumer spending – during the first four months was $943.1 million, up 10.7% compared with the same period in 2019 and up 11.5% above budget forecast.

As he has with previous reports, John Shelnutt, DFA director of economic analysis and tax research, said some of the gains come from “net collection increases” because of the income tax deadline shift from April to July.

Corporate income tax revenue during the first four months of the fiscal year was $164.7 million, up $11.6 million compared with the same period in 2019, and up $30.7 from the budget forecast.

OCTOBER REVENUE
Gross revenue in the month totaled $565.5 million, up 2% compared with October 2019, and 13.4% above the forecast.

Individual income tax revenue totaled $264 million in October, down 3.7% compared with October 2019, and 14.3% above the forecast. Sales and Use tax revenue in October totaled $239.2 million, up 12% compared with October 2019 and up 11.8% above the forecast. Corporate income tax revenue was $30.6 million in October, down $5.3 million compared with October 2019, but 32.3% above the forecast.

The previous fiscal year (July 2019-June 2020) ended with $369.4 million in net available revenue more than expected. Fiscal year 2020 tax revenue ended down just 2.5% despite several months in early 2020 of economic disruption resulting from COVID-19 shutdowns. The revenue was 4.1% above the revised forecast. Gross revenue in the previous fiscal year was $6.967 billion, 2.5% below fiscal year 2019, but up $272.5 million more than the forecast.

OTHER REVENUE SOURCES
Tobacco
July-October 2020: $76.5 million
July-October 2019: $74.8 million

Alcoholic beverages
July-October 2020: $22.7 million
July-October 2019: $20.6 million

Games of skill
July-October 2020: $10.1 million
July-October 2019: $13.5 million

Insurance
July-October 2020: $22.2 million
July-October 2019: $23.3 million