Arkansas’ net available tax revenue surplus tops $400 million

Arkansas’ tax revenue picture continues to be impressive, with gross revenue for the first seven fiscal months (July-January) up almost 10% compared with the same period in 2019-2020. January revenue was up more than 20% above forecast.

The Arkansas Department of Finance and Administration (DFA) reported Tuesday (Feb. 2) that gross revenue for fiscal year-to-date is $4.419 billion, up 9.7% compared with the same period in 2019-2020 and up 12.1% over the budget forecast. Tuesday’s report also showed a fiscal year-to-date revenue surplus – “net available revenue” collected beyond what was estimated – of $421.8 million.

Individual income tax revenue was $2.173 billion in the first seven fiscal months, up 11.2% compared to the same period in 2019-2020 and up 13.1% over the budget forecast. Sales and use tax revenue – an indicator of consumer spending – during the first seven months was $1.629 billion, up 7.5% compared with the same period in 2019 and up 8.3% above budget forecast.

Corporate income tax revenue during the first seven months of the fiscal year was $314.7 million, up $44 million compared with the same period in 2019-2020, and up 28.8% from the budget forecast.

“Individual Income Tax was above forecast by $86.8 million, with Estimated Payments and Payroll Withholding Tax running notably ahead of projections. Sales Tax Collections were above forecast by $16.5 million, in a broad based gain with continued growth in retail and vehicle sales,” John Shelnutt, DFA director of economic analysis and tax research, noted in a memo with the January report.

JANUARY REVENUE
Gross revenue in the month totaled $722 million, up 10.4% compared with January 2020, and 21.7% above the forecast.

Individual income tax revenue totaled $401.3 million in January, up 11.8% compared with January 2020, and 27.6% above the forecast. Sales and Use tax revenue in January totaled $236.9 million, up 5.6% compared with January 2020 and up 7.5% above the forecast. Corporate income tax revenue was $51 million in January, up $12.4 million compared with January 2020, and $23 million 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-January 2020: $131.2 million
July-January 2019: $127.9 million

Alcoholic beverages
July-January 2020: $39.4 million
July-January 2019: $35.9 million

Games of skill
July-January 2020: $18 million
July-January 2019: $22 million

Insurance
July-January 2020: $46.4 million
July-January 2019: $46.5 million