Arkansas tax revenue up 0.5%, surplus reaches $90 million

Driven in large part by gains in sales tax revenue, Arkansas’ tax revenue in the first four months (July-October) of the fiscal year is slightly better than in the same period of 2024, and the state’s tax surplus was $90 million at the end of October.

Total tax revenue in the four months was $2.646 billion, up 0.5% compared with the same period in 2024, and 3.5% more than the revenue forecast, the Arkansas Department of Finance and Administration (DFA) reported Tuesday (Nov. 4). The projected tax surplus through October is $90 million, according to the DFA.

Income tax revenue in the first four months of the fiscal year totaled $1.121 billion, down 0.5% compared with the same period in 2024, and 5.9% above the forecast. Sales tax revenue in the first four months totaled $1.213 billion, up 3.3% compared with the same period in the prior year and 2.7% above the forecast.

The corporate income tax was $130 million in the first three months of the fiscal year, down $21.8 million compared with the same period in 2024 and 5.8% below the forecast.

“October revenue collections exceeded forecast for gross revenues by $10.8 million and net revenues by $16.6 million,” DFA Secretary Jim Hudson said in a statement. “Wage withholding for personal income taxes was strong, growing year over year by 5.7%, and indicating continued strength in the state’s labor market. With four months completed in fiscal year 2026, year-to-date revenue collections exceed forecast by $90 million, pointing to stability in state revenues.”

OCTOBER REVENUE
October revenue totaled $629.4 million, up 0.2% compared with October 2024 and 1.7% above the budget forecast. October income tax revenue was $266.8 million, down 3% compared with October 2024 and 1.7% below the budget forecast.

“Compared to the forecast, collections were $4.7 million, or 1.7% lower, due to less-than-expected return payments, which may have been impacted by the extension of the due date to Dec. 3, 2025,” the DFA noted about income tax revenue in October.

Sales tax revenue in October was $304.3 million, up 2.1% compared with October 2024 and 3% above the forecast. The corporate income tax in October was $23.9 million, up $1.4 million compared with October 2024 and $4.1 million above the forecast.

Arkansas ended the previous fiscal year (July 2024-June 2025) with tax revenue of $8.359 billion, down 4% compared with the previous fiscal year. Tax revenue in the previous fiscal year also resulted in a $367.9 million surplus. The fiscal year ending in June 2024 posted a $698.4 million surplus, and the fiscal year ending June 2023 had a $1.161 billion tax revenue surplus.

OTHER REVENUE SOURCES
Tobacco
July-October 2025: $60.6 million
July-October 2024: $64.8 million

Insurance
July-October 2025: $33.6 million
July-October 2024: $29.1 million

Alcoholic beverages
July-October 2025: $25.6 million
July-October 2024: $25.7 million

Games of skill
July-October 2025: $19.6 million
July-October 2024: $18.8 million

Severance
July-October 2025: $3.4 million
July-October 2024: $4.1 million