Arkansas’ May tax revenue up almost 2%, year-to-date tax revenue down 1.1%

An almost $80 million gain in sales tax revenue was not enough to offset income and corporate tax revenue declines, leaving overall Arkansas tax revenue down 1.1% in the first 11 months of the fiscal year (July 2023-May 2024) compared to the same period in the previous fiscal year.

The estimated state revenue surplus remained at $708.1 million, which was first announced in mid May.

Total revenue in the first 11 fiscal months was $7.81 billion, down 1.1%, compared with the same period in the previous fiscal year, according to a report posted Tuesday (June 4) by the Arkansas Department of Finance and Administration (DFA). Total revenue was 0.1% above the forecast.

Income tax revenue in the first 11 fiscal months was $3.573 billion, down $89.1 million, or 2.5%, from the same period in 2023 but 0.2% above forecast. Sales tax revenue in the first 11 fiscal months was $3.185 billion, up $79.5 million, or 2.6% above the same period in 2023 and 0.3% below the forecast. Corporate income tax revenue in the first 11 months was $642.2 million, down $78 million compared with the 2023 period and 1.3% above the forecast.

“Our May 2024 revised forecast anticipates a revenue surplus of more than $708 million at the end of Fiscal Year 2024. That projection remains on target with one month remaining in the fiscal year. Individual and corporate income tax collections surpassed forecast in May, despite the impact of the most recent round of tax cuts on January 1. Daily revenue collection will be closely monitored as we prepare to formally close another successful fiscal year,” Jim Hudson, secretary of the Arkansas Department of Finance and Administration, said in a statement.

MAY REVENUE
Total revenue in May was $596.5 million, up 1.8% compared with May 2023, and 1.4% above forecast. Individual income tax revenue in May was $247.9 million, down 1% compared with May 2023, and 2.4% above the budget forecast.

Sales and use tax revenue was $285.7 million, down 1% compared with May 2023 and 2.4% above the forecast. Corporate income tax revenue was $25.9 million, up $17.8 million compared with May 2023, and $8 million above the forecast.

Arkansas ended the previous fiscal year (July 2022-June 2023) with a $1.161 billion tax revenue surplus driven in large part by a more than 8% growth in sales tax collections. Total tax revenue in the fiscal year was $8.85 billion, up 0.9% compared with the previous fiscal year and 1.7% more than the budget forecast.

The fiscal year surplus of $1.161 billion was the third consecutive year of a surplus of near or more than $1 billion. Total tax revenue in fiscal year 2022 (July 2021-June 2022) was $8.773 billion, up 8% – or $651.2 million – and the budget surplus was $1.628 billion. The surplus in the fiscal year that ended June 2021 was $945.7 million.

OTHER TAX REVENUE
Tobacco
July 2023-May 2024: $177.4 million
July 2022-May 2023: $187.9 million

Insurance
July 2023-May 2024: $90.1 million
July 2022-May 2023: $83 million

Alcoholic beverages
July 2023-May 2024: $69.4 million
July 2022-May 2023: $67.6 million

Games of skill
July 2023-May 2024: $52.4 million
July 2022-May 2023: $48.8 million