Arkansas tax revenue surplus near $175 million in the first fiscal quarter

Arkansas’ tax revenue surplus is almost $175 million to end the first quarter of Arkansas’ fiscal year (July-September 2022). Total revenue in the three month period was $2.08 billion, up 6.4% compared to the same period in 2021 and up 9.2% above forecast.

State tax coffers ended the previous fiscal year in June with a $1.62 billion surplus.

Individual income tax revenue in the first fiscal quarter was $879.9 million, up 4.8% compared to the same period in 2021, and 5.3% above the budget forecast, according to Tuesday’s (Oct. 4) report from the Arkansas Department of Finance and Administration (DFA). The report said the net available revenue – surplus – at the end of the quarter was $174.8 million.

Sales and use tax revenue in the first quarter was $849.2 million, up 9.5% compared with the same period in 2021 and up 8.4% above the forecast. Quarterly corporate income tax revenue was $206.9 million, up $15.8 million compared to the same period in 2021, and 44.9% above the forecast.

“Most major reporting of Sales Tax displayed high growth over the prior year, reflecting continuing economic expansion in many sectors. Motor vehicle sales tax collections were up 2% from year ago September,” John Shelnutt, DFA administrator of economic and tax research, noted in Tuesday’s report.

SEPTEMBER COLLECTIONS
September revenue was $849.6 million, 11% more than September 2021 and 19% above forecast. September individual income tax revenue was $361.4 million, up 8.6% compared to September 2021 and 12% above forecast.

September sales and use tax was $288.7 million, up 11.5% compared with September 2021 and above the budget forecast. The corporate income tax revenue in September was $164.8 million, up $24.8 million compared to September 2021 and $64.3 million above the forecast.

“Corporate and Individual Income tax filings in September indicate we are on track for a third consecutive year of high growth in incomes,” Larry Walther, Secretary of the Arkansas Department of Finance and Administration, noted in a statement. “There appears to be no pullback in tax payments for Tax Year 2022 liabilities. This helps explain continued double-digit gains in Sale Tax collections.”

Inflation continues to be a part of tax revenue gains nationwide. The August Consumer Price Index, posted Sept. 13 by the U.S. Bureau of Labor Statistics, reported that all indexed items were up 8.3% compared with August 2021.

The September report is also up against big gains in previous fiscal years. Total tax revenue in fiscal year 2022 (September 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.

OTHER REVENUE SOURCES
Tobacco
July-September 2022: $52.6 million
July-September 2021: $56.8 million

Alcoholic beverages
July-September 2022: $19.2 million
July-September 2021: $19.5 million

Games of skill
July-September 2022: $12.2 million
July-September 2021: $10.4 million

Insurance
July-September 2022: $23.9 million
July-September 2021: $22.8 million