Arkansas revenue surplus rises to $231.2 million, year-to-date revenue down 1.8%

State tax revenue totaled $4.86 billion in the first seven months (July 2023-January 2024) of the fiscal year, down 1.8% compared with the same period in the previous fiscal year, and up 6.3% against the budget forecast.

The state’s surplus – net available revenue above forecast – at the end of January was $231.2 million, according to a report posted Friday (Feb. 2) by the Arkansas Department of Finance and Administration (DFA).

Income tax revenue in the first seven fiscal months was $2.1 billion, down 4.5% from the same period in 2022 and 5.7% above forecast. Sales tax revenue in the first seven fiscal months was $2.045 billion, up 3.1% above the same period in 2022-2023 and 2.5% above the forecast. The corporate income tax in the first seven months was $392.2 million, down $51.4 million compared with the 2022 period and 46.9% million above the forecast.

“January results reflect a stable Arkansas economy that is normalizing after the impact of significant stimulus in recent years,” DFA Secretary Jim Hudson said in a statement. “State revenue collections remain favorable relative to our forecast, and we are positive in our outlook for the five months remaining in Fiscal Year 2024.”

JANUARY REVENUE
Total revenue in January was $767.7 million, down 4.9% compared with January 2023, and 5% above forecast. Individual income tax revenue in January was $379.8 million, down 14% compared with January 2023, and 0.7% below the budget forecast.

Sales and use tax revenue was $302.3 million, up 2.6% compared with January 2023 and 1.7% above the forecast.

“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 1.2 percent from year ago,” the DFA noted in the report.

Corporate income tax revenue was $54.3 million, down $17.6 million compared with January 2023, and $36.1 million above the forecast.

Arkansas ended the previous fiscal year (July 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 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 (July 2021-June 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-January 2023: $115.6 million
July 2022-January 2022: $120.9 million

Insurance
July 2023-January 2023: $56.9 million
July 2022-January 2022: $53.6 million

Alcoholic beverages
July 2023-January 2023: $44.1 million
July 2022-January 2022: $43.3 million

Games of skill
July 2023-January 2023: $30.8 million
July 2022-January 2022: $27.4 million