Arkansas tax revenue up 2.6% in July, 3% above forecast

Arkansas began its fiscal year in July with sales tax revenue of $615.9 million, up 2.6% compared with July 2021, and 3% above the forecast. After ending the previous fiscal year in June with a $1.62 billion surplus, the surplus after July stands at $26.6 million.

The Arkansas Department of Finance and Administration reported Tuesday (Aug. 2) the tax revenue which showed gains above forecast in the key categories. Individual income tax revenue was $253.1 million in July, up 4.7% compared with July 2021 and up 4.7% above forecast.

Sales and use tax revenue was $272.4 million, up 4.7% above July 2021 and also 4.7% above the forecast. Corporate tax revenue was $35.1 million, down $4.8 million compared with July 2021 and $2 million above the forecast.

“Sales Tax growth remained high across consumer- and business-related sectors while vehicle sales tax collections moved lower. … Collections from motor vehicle sales tax were down 8.3 percent in July from year ago levels,” John Shelnutt, DFA administrator of economic and tax research, noted in Tuesday’s report.

DFA Secretary Larry Walther said the July numbers show no signs of an economic slowdown.

“July revenue results are above forecast with no signs of recession in state revenue collections from either consumers or businesses. We will watch for any evidence of pullback as Fiscal Year 2023 continues,” he said in a statement.

Total tax revenue in fiscal year 2022 (July 2021-June 2022) was $8.773 billion, up 8% – or $651.2 million – compared with a robust fiscal year 2021 in which the tax surplus was $945.7 million. Gov. Asa Hutchinson has called a special legislative session for Aug. 9 to expedite previously approved income tax cuts.

OTHER REVENUE SOURCES
Tobacco
July 2022: $18.5 million
July 2021: $18.9 million

Alcoholic beverages
July 2022: $7 million
July 2021: $7.1 million

Games of skill
July 2022: $4.8 million
July 2021: $3.7 million

Insurance
July 2022: $1 million
July 2021: $400,000