Income tax shift helps boost Arkansas’ August tax revenue

Arkansas tax revenue was up 8% in August compared with August 2024 and is up 5.7% in the first two fiscal months (July-August 2025) of the year compared with the same period in 2024, the Arkansas Department of Finance and Administration (DFA) reported Wednesday (Sept. 3).

Total tax revenue in the first two months is $1.289 billion, up 5.7% compared with the same period in 2024 and 6.5% above the budget forecast. The DFA report noted that some of the gains were from a delay in tax payments authorized earlier this year by Gov. Sarah Sanders in areas hit by severe weather.

“August collections include some shifting of quarterly estimated and extension tax payments from April and June because of the executive orders issued by Gov. Sanders to provide relief to Arkansans affected by recent severe weather,” according to the DFA tax report.

Income tax revenue in the first two months of the year totaled $522.9 million, up 7.7% compared with the same period in 2024 and 10.9% above the forecast. Sales tax revenue in the first two months totaled $622.2 million, up 4.2% compared with the same period in the prior year and 2.8% above the forecast.

The corporate income tax was $29.8 million in the first two months of the fiscal year, up $2.8 million compared with the same period in 2024 and 36.6% above the forecast.

AUGUST NUMBERS
August revenue totaled $653.1 million, up 8% compared with August 2024 and 8.1% above the budget forecast. August income tax revenue was $263.1 million, up 10.6% compared with August 2024 and 12.2% above the budget forecast.

Sales tax revenue in August was $322.9 million, up 5.2% compared with August 2024 and 4.8% above the forecast. The corporate income tax in August was $5.5 million, up $1.5 million compared with August 2024 and $2.1 million above the forecast.

“August revenue collections continued our positive momentum from July’s results, with net general revenue beating (the) forecast by $46.6 million and exceeding last year’s results by $52.6 million, an increase of over 10%,” DFA Secretary Jim Hudson said in a statement. “Sales taxes, corporate estimated tax payments, and individual income tax withholding all contributed to August’s strong results and are indicative of a healthy and growing state economy.”

Arkansas ended the previous fiscal year (August 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-August 2025: $30.5 million
July-August 2024: $32.6 million

Insurance
July-August 2025: $30.4 million
July-August 2024: $24.8 million

Alcoholic beverages
July-August 2025: $13.6 million
July-August 2024: $13.7 million

Games of skill
July-August 2025: $11 million
July-August 2024: $10.5 million

Severance
July-August 2025: $2 million
July-August 2024: $2.5 million