Lower tax rates push Arkansas revenue down almost 3%

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by Talk Business & Politics staff ([email protected]) ago 145 views 

Arkansas’ fiscal year-to-date (July 2024-December 2024) tax revenue is $3.973 billion, down 2.9% compared with the same period in the previous fiscal year, according to Friday’s (Jan. 3) report from the Arkansas Department of Finance and Administration (DFA).

The revenue is 0.7% above the budget forecast, and the state’s estimated fiscal year surplus remains at $278.6 million, which would be below the $698.4 million surplus in the previous fiscal year.

Income tax revenue in the first six months was $1.667 billion, down 3.7% compared with the same period in the previous fiscal year and 2.4% above the forecast. Sales tax revenue was $1.769 billion, up 1.5% compared with the same period in the previous fiscal year and 0.4% above the forecast. The corporate income tax revenue was $250.6 million, $87.4 million below the same period in the previous fiscal year and 7% below the forecast.

“The decrease in year-to-date revenues compared to FY 2024 is largely due to the impact of individual and corporate income tax rate reductions passed in the First and Second Extraordinary Sessions of the 94th General Assembly,” the DFA noted in its report.

Total revenue in December was $723.6 million, 5.9% below December 2023, and 2.5% above the budget estimate. December income tax revenue was $295.7 million, up 0.6% compared with December 2023 and 13.5% above the budget forecast.

December sales tax revenue was $299.7 million, up $1.3 million compared with December 2023, and 0.8% above the budget estimate. Corporate income tax revenue in December was $81.5 million, down $49.2 million compared with December 2023 and $22 million below the budget estimate.

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-December 2024: $101 million
July 2023-December 2023: $95.2 million

Insurance
July 2024-December 2024: $62.6 million
July 2023-December 2023: $56.3 million

Alcoholic beverages
July 2024-December 2024: $38.1 million
July 2023-December 2023: $37.7 million

Games of skill
July 2024-December 2024: $27.5 million
July 2023-December 2023: $25.8 million