Arkansas’ year-to-date sales tax revenue up 13.2%, surplus tops $450 million

Broad gains in consumer spending helped push Arkansas’ year-to-date (July 2021 to March 2022) tax revenue up 7.6%, with sales tax revenue in March up 33.2% compared with March 2021. Overall gains in tax revenue has boosted the state’s revenue surplus to $456 million.

The fiscal year-to-date revenue is $5.898 billion, up 7.6% compared with the same period in 2021 and up 8.4% above forecast, according to Monday’s (April 4) report from the Arkansas Department of Finance and Administration (DFA).

“Revenue gains beat the monthly forecast by a wide margin in March in all major categories. We are matching and in fact exceeding the stimulus-driven gains made this time last year. Year to date sales tax collection has increased 13.2% from the same period last year. We will closely monitor daily revenue collection throughout April, which is normally our largest month for collection,” DFA Department Secretary Larry Walther noted in a statement.

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 March that pushed some of fiscal 2020 income tax payments into 2021.

Individual income tax revenue in the first nine fiscal months was $2.718 billion, up 0.8% from the same period in the previous fiscal year, and 11.4% above the budget estimate.

Sales and use tax revenue, an indicator of consumer spending, was $2.335 billion in the first nine months up 13.2% compared with the previous fiscal year and 4.8% over the budget forecast. The sales and use tax has generated $271.5 million of the year-to-date budget surplus.

“Major reporting of Sales Tax displayed large gains compared to year ago in part from comparison with the snow week last year and allowance for the one-month lag in vendor reporting. Motor Vehicle Sales Tax was down 6.8 percent from last year, largely because of the spike in vehicle sales and collections from last March,” John Shelnutt, DFA administrator of economic and tax research, noted in the report.

Fiscal year-to-date corporate income tax revenue totaled $448.7 million, up $104.3 million compared with the previous fiscal year and 15.9% above the budget forecast.

MARCH REVENUE
Gross revenue in March was $691.5 million, up 21.4% compared with March 2021 and 30.7% above forecast. Individual income tax revenue was $312.2 million, up 9% over March 2021 and 34.9% above the budget forecast.

Sales and use tax revenue in March was $283.3 million, up 33.2% compared with March 2021 and 23.3% above the forecast. Corporate income tax revenue was $40.5 million, up $16.1 million compared with March 2021 and $25.9 million above forecast.

OTHER REVENUE SOURCES
Tobacco
July 2021-March 2022: $161.2 million
July 2020-March 2021: $166.1 million

Alcoholic beverages
July 2021-March 2022: $53 million
July 2020-March 2021: $48.3 million

Games of skill
July 2021-March 2022: $31.4 million
July 2020-March 2021: $23.4 million

Insurance
July 2021-March 2022: $76.6 million
July 2020-March 2021: $65.5 million