Arkansas tax surplus at $108.2 million, tax revenue down 1.1% in first fiscal quarter

Total Arkansas tax revenue in the first fiscal quarter (July-September 2023) was $2.057 billion, down 1.1% compared with the same period of 2022, but 6.9% above the forecast.

The state’s surplus – net available revenue above forecast – at the end of September was $108.2 million, according to a report posted Tuesday (Oct. 3) by the Arkansas Department of Finance and Administration (DFA).

Income tax revenue in the first three fiscal months was $882.7 million, 0.3% above the same period in 2022 and 9% above forecast. Sales tax revenue in the first three fiscal months was $871.3 million, up 2.6% above the same period in 2022 and 3.3% above the forecast. The corporate income tax in the first three months was $160.6 million, down $46.2 million compared with the 2022 period and 26.2% above the forecast.

“Net Available revenue results were above forecast in all major revenue categories in September,” John Shelnutt, DFA administrator of economic and tax research, noted in Tuesday’s report. “Major reporting sectors of Sales Tax displayed mostly higher growth over the prior year, reflecting continuing economic expansion in many sectors. Motor vehicle sales tax collections were down 19.7 percent from year ago September, in part from one-time revenue impact from the shift to registration payment deadline extension.”

SEPTEMBER REVENUE, SURPLUS HISTORY
Total revenue in September was $801.3 million, down 5.7% compared with September 2022, and up 10.6% above forecast. Individual income tax revenue in September was $349.9 million, down 3.2% compared with September 2022, and 12.5% above the budget forecast.

Sales and use tax revenue was $296.9 million, up 2.8% compared with September 2022 and up 6.3% above the forecast. Corporate income tax revenue was $120 million, down $44.7 million compared with September 2022, and $20.4 million above the forecast.

Arkansas ended the previous fiscal year (September 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 (September 2022-September 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 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.

OTHER TAX REVENUE
Tobacco
July 2023-August 2023: $44.7 million
July 2022-August 2022: $52.6 million

Insurance
July 2023-August 2023: $25.2 million
July 2022-August 2022: $23.9 million

Alcoholic beverages
July 2023-August 2023: $19.9 million
July 2022-August 2022: $19.2 million

Games of skill
July 2023-August 2023: $14.1 million
July 2022-August 2022: $12.2 million