Arkansas tax revenue down 2.2%; surplus estimated to be $278.6 million
Arkansas’ fiscal year tax revenue surplus is estimated to be $278.6 million, below the $698.4 million surplus in the previous fiscal year, with the decline primarily the result of income tax rate reductions approved in the 94th General Assembly.
The Arkansas Department of Finance and Administration (DFA) reported Tuesday (Dec. 3) that the state’s fiscal year-to-date (July 2024-November 2024) tax revenue is $3.249 billion, down 2.2% compared with the same period in the previous fiscal year and 0.4% above the budget forecast.
Income tax revenue in the first five months was $1.371 billion, down 4.5% compared with the same period in the previous fiscal year and 0.2% above the forecast. Sales tax revenue was $1.469 billion, up 1.7% compared with the same period in the previous fiscal year and 0.4% above the forecast. The corporate income tax was $169.1 million, $38.2 million below the same period in the previous fiscal year and 1.9% above the forecast.
The DFA noted in the report that the overall revenue decline is attributable to the individual and corporate income tax rate reductions recently approved by the Arkansas Legislature.
NOVEMBER REVENUE
Total revenue in November was $617.9 million, 1.9% above November 2023, and 1.9% above the budget estimate. November income tax revenue was $245.1 million, down 1% compared with November 2023 and 1.4% above the budget forecast.
November sales tax revenue was $294.9 million, up $7.8 million compared with November 2023, and 1.9% above the budget estimate. Corporate income tax revenue in November was $17.3 million, down $5.1 million compared with November 2023 and $3.2 million above the budget estimate.
“November general revenue collections were strong, exceeding both last year’s collections and the forecast. Overall economic activity in Arkansas is healthy as we move into the holiday season, and our outlook remains positive,” DFA Secretary Jim Hudson said in a statement.
The state ended the previous fiscal year with a $698.4 million surplus. 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.
OTHER REVENUE SOURCES
Tobacco
July 2024-November 2024: $80.1 million
July 2023-November 2023: $82.9 million
Insurance
July 2024-November 2024: $57.5 million
July 2023-November 2023: $52.2 million
Alcoholic beverages
July 2024-November 2024: $31.8 million
July 2023-November 2023: $32 million
Games of skill
July 2024-November 2024: $22.8 million
July 2023-November 2023: $22 million