Arkansas’ tax revenue dips almost 3%; surplus estimated at $280.2 million

Arkansas’ fiscal year-to-date (July 2024-August 2024) tax revenue is down 2.9% compared with the same period in the previous fiscal year, and the revised budget indicates the state will end the fiscal year in June 2025 with a $280.2 million surplus.

The estimated surplus will be well below the $698.4 million in the fiscal year that ended June 2024. The state ended the fiscal year before that with a $1.161 billion tax revenue surplus. The surplus of $1.161 billion was the third consecutive year of a surplus of near or more than $1 billion.

“The Official General Revenue Forecast was revised on August 22, 2024, and includes the impact to individual and corporate income taxes resulting from Act 4 of the Second Extraordinary Session in 2024,” noted a statement from the Arkansas Department of Finance and Administration (DFA). “The revised forecast projects a year-end surplus of $280.2 million. The following comparisons to forecast of monthly and year-to-date results reflect the latest forecast revision.”

Total tax revenue in the first two months was $1.22 billion, down 2.9% compared with the same period in the previous fiscal year and 1% above the budget forecast, according to Wednesday’s (Sept. 4) DFA report.

Income tax revenue in the two-month period was $485.3 million, down 8.9% compared with the same period in the previous fiscal year and 0.9% above the forecast. Sales tax in the two months was $597.1 million, up 3.9% compared with the same period in the previous fiscal year and 2.1% above the forecast. the corporate income tax was $27 million, $13.6 million below the same period in the previous fiscal year an 14.6% below the forecast.

OTHER REVENUE SOURCES
Tobacco
July 2024-August 2024: $32.6 million
July 2023-August 2023: $33.9 million

Insurance
July 2024-August 2024: $24.8 million
July 2023-August 2023: $22 million

Alcoholic beverages
July 2024-August 2024: $13.7 million
July 2023-August 2023: $13.6 million

Games of skill
July 2024-August 2024: $10.5 million
July 2023-August 2023: $10.1 million