Arkansas tax revenue up 1.2%, surplus rises to $102.9 million

Arkansas tax revenue is up 1.2%, or almost $50 million, in the first half (July 2025-December 2025) of the state’s fiscal year. The revenue surplus is $102.9 million, up from $108 million in the November report.

Total tax revenue in the six months was $4.023 billion, up 1.2% compared with the same period in 2024, and 3% more than the revenue forecast, the Arkansas Department of Finance and Administration (DFA) reported Monday (Jan. 5).

Income tax revenue in the first six months of the fiscal year totaled $1.691 billion, up 1.5% compared with the same period in 2024 and 5.7% above the forecast.

Sales tax revenue in the first six months totaled $1.825 billion, up 3.2% compared with the same period in the prior year and 1.9% above the forecast. The corporate income tax was $219.6 million in the first six months of the fiscal year, down $31 million compared with the same period in 2024 and 4.7% below the forecast.

“December 2025 gross general revenue was ahead of forecast by $3.6 million, while net general revenue was just under forecast by $5.8 million, largely due to higher than expected corporate income tax refunds,” DFA Secretary Jim Hudson said in a statement. “Halfway through the 2026 fiscal year, the state’s revenue collections are stable and $102 million ahead of forecast. The department will issue an updated forecast in late January for the remainder of fiscal year 2026 and for fiscal year 2027 in preparation for the upcoming fiscal legislative session.”

DECEMBER NUMBERS
December revenue totaled $714.2 million, down 1.3% compared with December 2024 and 0.5% above the budget forecast. December income tax revenue was $285 million, down 3.6% compared with December 2024 and 1.9% above the budget forecast.

“Collections decreased by $10.7 million, or 3.6% compared to last year,” noted the DFA report. “Lower estimated payments were offset by increased return payments resulting from the extension of the due date to Dec. 3, 2025. Lower withholding was impacted by one less payday. Although lower than last year, individual income tax collections were $5.4 million, or 1.9% higher than forecast.”

Sales tax revenue in December was $308.7 million, up 3% compared with December 2024 and 2.1% above the forecast. Corporate income tax revenue in December was $78.1 million, down $3.4 million compared with December 2024 and $5.5 million below 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-December 2025: $90.2 million
July-December 2024: $95.2 million

Insurance
July-December 2025: $68.6 million
July-December 2024: $62.6 million

Alcoholic beverages
July-December 2025: $37.4 million
July-December 2024: $38.1 million

Games of skill
July-December 2025: $28.5 million
July-December 2024: $27.5 million

Severance
July-December 2025: $4.8 million
July-December 2024: $6 million