Arkansas’ fiscal year-to-date tax revenue up 5.9%

Continued gains in sales tax revenue helped push Arkansas’ fiscal year-to-date (July 2021 to January 2022) tax revenue to $4.678 billion, up 5.9% compared with the same period in the previous fiscal year and 5.2% above the budget forecast.

The fiscal year-to-date gain creates $231.2 million for the state above the budget expectation, according to Wednesday’s (Feb. 2) report from the Arkansas Department of Finance and Administration (DFA).

Arkansas ended fiscal year 2021 (July 2020 – June 2021) with a revenue surplus of $945.7 million thanks in part to the COVID-19 induced shift in a tax filing deadline from June to January that pushed some of fiscal 2020 income tax payments into 2021.

Individual income tax revenue in the first seven fiscal months was $2.141 billion, down 1.5% from the same period in the previous fiscal year, but 7% above the budget estimate. Sales and use tax revenue, an indicator of consumer spending, was $1.824 billion in the first seven months, up 11.9% compared with the previous fiscal year and 2.7% over the budget forecast. The sales and use tax has generated $194.6 million of the year-to-date budget surplus.

Fiscal year-to-date corporate income tax revenue totaled $401.2 million, up $86.5 million compared with the previous fiscal year and 9.8% above the budget forecast.

JANUARY REVENUE
Gross revenue in January was $782 million, up 8.3% compared with January 2021 and 28.7% above forecast. Individual income tax revenue was $445.8 million, up 11.1% over January 2021 and 38.5% above the budget forecast.

John Shelnutt, DFA director of economic analysis and tax research, said the large gain above forecast included a 13.4% increase in individual tax withholding and “payday timing differences” compared to a year ago.

Sales and use tax revenue in January was $268.7 million, up 13.4% compared with January 2020 and 14.6% above the forecast. Corporate income tax revenue was $29.2 million, down $21.9 million compared with January 2021 and $11.1 million above forecast.

OTHER REVENUE SOURCES
Tobacco
July 2021-January 2022: $129.3 million
July 2020-January 2021: $131.2 million

Alcoholic beverages
July 2021-January 2022: $42.6 million
July 2020-January 2021: $39.4 million

Games of skill
July 2021-January 2022: $24.4 million
July 2020-January 2021: $18 million

Insurance
July 2021-January 2022: $49.8 million
July 2020-January 2021: $46.4 million