Arkansas’ March tax revenue up 3.2%, year-to-date revenue down 1.5%

Sales tax and income tax gains pushed Arkansas’ total tax revenue up more than 3% in March, but year-to-date revenue is down 1.5%, according to a report posted Tuesday (April 2) by the Arkansas Department of Finance and Administration (DFA).

State tax revenue totaled $6.1 billion in the first nine months (July 2023-March 2024) of the fiscal year, down 1.5% compared with the same period in the previous fiscal year, and up 1.4% against the budget forecast.

Income tax revenue in the first nine fiscal months was $2.658 billion, down 3.3% from the same period in 2023 and 1.8% above forecast. Sales tax revenue in the first nine fiscal months was $2.598 billion, up 2.9% above the same period in 2023 and 1% above the forecast. The corporate income tax in the first nine months was $442.9 million, down $71 million compared with the 2023 period and 2.7% above the forecast.

“March 2024 net available and gross revenues exceeded forecast and March 2023 results. We remain optimistic concerning the Arkansas economy and our revenue forecast as we move into the last quarter of FY 2024,” Jim Hudson, Secretary of the Arkansas Department of Finance and Administration, noted in a statement.

The state’s budget surplus – net available revenue above the budget forecast – at the end of March was $77.8 million.

MARCH COLLECTIONS
Total revenue in March was $688.8 million, up 3.2% compared with March 2023, and 9.6% above forecast. Individual income tax revenue in March was $302.7 million, up 9.7% compared with March 2023, and 14.3% above the budget forecast.

Sales and use tax revenue was $295.3 million, up $11.9 million compared with March 2023 and 7.2% above the forecast.

“Most major reporting sectors of Sales Tax displayed growth over the prior year. Motor vehicle
sales tax collections were down 19.2 percent from year ago,” the DFA noted in the report.

Corporate income tax revenue was $36 million, down $13 million compared with March 2023, and $5.4 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-March 2024: $145.6 million
July 2022-March 2023: $153.3 million

Insurance
July 2023-March 2024: $86.3 million
July 2022-March 2023: $81.4 million

Alcoholic beverages
July 2023-March 2024: $55.2 million
July 2022-March 2023: $54.5 million

Games of skill
July 2023-March 2024: $40.7 million
July 2022-March 2023: $37.5 million