Helped in part by gains in auto and retail sales, Arkansas’ tax revenue in the first two months (July-August 2023) of the fiscal year was $1.256 billion, up 2.1% above the same period in 2022 and 4.6% above the forecast.
The state’s surplus – net available revenue above forecast – at the end of August was $33.2 million, according to a report posted Tuesday (Sept. 5) by the Arkansas Department of Finance and Administration (DFA).
Income tax revenue in the first two fiscal months was $532.8 million, 2.8% above the same period in 2022 and 6.8% above forecast. Sales tax revenue in the first two fiscal months was $574.4 million, 2.5% above the same period in 2022 and 1.9% above the forecast. The corporate income tax in the first two months was $40.6 million, down $1.5 million compared with the 2022 period and 46.5% above the forecast.
“Net Available revenue results were above forecast in all major revenue categories in August. Sales Tax collection growth was driven higher by the motor vehicle sales, retail, and restaurants. Individual Income Tax gains were driven largely by non-Withholding Tax categories, in part from shifted tax filings in tornado-damaged counties. Corporate Income Tax collections were above forecast in a normally light collection month for that category,” John Shelnutt, DFA administrator of economic and tax research, noted in Tuesday’s report.
Total revenue in August was $613.3 million, down 0.2% compared with August 2022, and 5.8% above forecast. Individual income tax revenue in August was $256.6 million, down 3.3% compared with August 2022, and 8.8% above the budget forecast.
Sales and use tax revenue was $292.1 million, up 1.4% compared with August 2022 and 3.1% above the forecast. Corporate income tax revenue was $9.4 million, up $2.4 million compared with August 2022, and $3.9 million above the forecast.
“Revenues remain above forecast after two months of Fiscal Year 2024, demonstrating resilience in the state economy and continued optimism concerning our state’s fiscal position,” Jim Hudson, secretary of the Arkansas Department of Finance and Administration, said in a statement.
Arkansas ended the previous fiscal year (August 2022-June 2023) with a $1.161 billion tax revenue surplus driven in large part by a more than 8% growth in sales tax collections. Total tax revenue in the fiscal year (August 2022-August 2023) was $8.85 billion, up 0.9% compared with the previous fiscal year and 1.7% more than the budget forecast.
The fiscal year surplus of $1.161 billion was the third consecutive year of a surplus of near or more than $1 billion. Total tax revenue in fiscal year 2022 (August 2022) was $8.773 billion, up 8% – or $651.2 million – and the budget surplus was $1.628 billion. The surplus in the fiscal year that ended June 2021 was $945.7 million.