Arkansas tax revenue up 5% through March, surplus tops $300 million

Arkansas tax revenue in the first nine fiscal months of the year (July 2022-March 2023) totaled $6.192 billion, up 5% compared with the same period in the previous fiscal year and 4.9% over the forecast. The revenue surplus was $306.7 million at the end of March.

In the March revenue report posted Tuesday (April 4), the Arkansas Department of Finance and Administration (DFA) reported that collections were above forecast for income tax and corporate tax revenue, but below estimates in sales tax revenue.

Individual income tax revenue in the first nine months of the fiscal year was $2.748 billion, up 1.1% compared to the same period in 2021-2022, and 4% above the budget forecast. Sales and use tax revenue in the first nine months was $2.526 billion, up 8.2% compared with the same period in the previous fiscal year and up 2.2% above the forecast. Corporate income tax revenue in the first nine months was $513.8 million, up $65.1 million compared to the same period in 2021-2022, and 28.3% above the forecast.

Tax revenue in March totaled $667.5 million, down 3.5% compared with March 2022, and up 4.2% compared with the budget forecast.

March individual income tax revenue was $275.9 million, down 11.6% compared to March 2022 and 2.5% above forecast. March sales and use tax was $283.3 million, unchanged compared with March 2022, and 2.7% above forecast. Corporate income tax revenue in March was $49 million, up $18.6 million compared with March 2022 and $23.4 million above forecast.

“Results by major reporting sector in Sales Tax displayed mixed results from prior year and adverse comparison with stimulus spending in the prior year. Motor vehicle sales tax collections were up 5.6 percent from year ago March,” John Shelnutt, DFA administrator of economic and tax research, noted in Tuesday’s report.

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

OTHER REVENUE SOURCES
Tobacco
July 2022-March 2023: $153.3 million
July 2021-March 2022: $161.2 million

Insurance
July 2022-March 2023: $81.4 million
July 2021-March 2022: $76.6 million

Alcoholic beverages
July 2022-March 2023: $54.5 million
July 2021-March 2022: $53 million

Games of skill
July 2022-March 2023: $37.5 million
July 2021-March 2022: $31.4 million