Arkansas tax revenue surplus tops $250 million; collections up 8.3% in February report

Arkansas consumers continue to spend in the face of persistent inflation. The state’s sales tax revenue in the first eight months of the fiscal year is up 9.3%, with February sales tax revenue up 13.1%. Overall tax revenue in February was up 8.3%.

Another month, another similar growth story with Arkansas’ tax revenue. Total revenue in the February report was $807 million, up 3.2% compared to what was a healthy February 2021, and up 9.6% above the budget forecast.

In the February revenue report posted Thursday (March 2) by the Arkansas Department of Finance and Administration (DFA) reported that “collections were above forecast in all major collection categories.” It’s a phrase that has become common with the DFA revenue reports.

Year-to-date (July 2022-February 2023) tax revenue was $5.524 billion, up 6.1% compared with the same period in the previous fiscal year.

Individual income tax revenue in the first eight months of the fiscal year (July-February) was $2.472 billion, up 2.8% compared to the same period in 2021, and 4.1% above the budget forecast. The report said the net available revenue – surplus – at the end of the first eight months was $250.2 million.

Sales and use tax revenue in the first eight months was $2.242 billion, up 9.3% compared with the same period in 2021-2022 and up 2.9% above the forecast. Corporate income tax revenue in the first eight months was $464.8 million, up $56.6 million compared to the same period in 2021-2022, and 24% above the forecast.

“Revenue growth was above expectations again in February, demonstrating continued economic growth in Arkansas,” Larry Walther, secretary of the Arkansas Department of Finance and Administration, said in a statement. “Additionally, tax refunds are on track with the forecast as we enter the busiest months for filing.”

Tax revenue in February totaled $572.4 million, up 8.3% compared with February 2022, and up 11.3% compared with the budget forecast.

February individual income tax revenue was $262.7 million, down 0.8% compared to February 2022 and 11.3% above forecast. February sales and use tax was $258.1 million, up 13.1% compared with February 2022, and 11.7% above forecast. Corporate income tax revenue in February was $21.1 million, up $14.1 million compared with February 2022 and $15.6 million above forecast.

Total tax revenue in fiscal year 2022 (July 2021-June 2022) was $8.773 billion, up 8% – or $651.2 million – compared with the robust fiscal year 2021 in which the tax surplus was $945.7 million. State tax coffers ended the previous fiscal year in June with a $1.62 billion surplus.

OTHER REVENUE SOURCES
Tobacco
July 2022-February 2023: $134.9 million
July 2021-February 2022: $144.4 million

Alcoholic beverages
July 2022-February 2023: $48.7 million
July 2021-February 2022: $47.6 million

Games of skill
July 2022-February 2023: $32.4 million
July 2021-February 2022: $27.7 million

Insurance
July 2022-February 2023: $55.9 million
July 2021-February 2022: $51.4 million