Income tax revenue gains push Arkansas tax revenue up 2.5% through March

The state revenue report issued a few days ahead of Arkansas legislators convening for a fiscal session shows total revenue up 2.5% in the first nine months (July 2025- March 2026) of the fiscal year, with a surplus approaching $400 million.

Gross tax revenue at the end of March was $6.057 billion, up 2.5% compared with the same period in the previous fiscal year, and $57.3 million above the budget forecast that was revised Jan. 30, the Arkansas Department of Finance and Administration (DFA) reported Tuesday (April 2).

Income tax revenue so far in the fiscal year totals $2.669 billion, up 3.9% compared with the previous fiscal year and 1.2% above the budget forecast. Sales tax revenue in the first nine months of the fiscal year was $2.711 billion, up 3.6% compared with the same period in the previous fiscal year and 1.1% above the forecast.

Corporate income tax revenue through March was $276.8 million, down $44.8 million from the same period in the previous fiscal year and 0.3% above the forecast.

“March revenue collection surpassed forecast by more than 12.5%, reflecting a rebound from February results that were impacted by winter weather” said DFA Secretary Jim Hudson. “Sales tax collection increased by more than $29 million over last year, including growth in manufacturing and construction, two of our key indicators. In addition, individual income tax collection increased by $34 million year to year. As we move into our last quarter of the fiscal year, we remain confident in our forecast, with our year to date results ahead of forecast by over $61 million.”

The surplus prior to the budget forecast revision was $334 million, with the post-revision surplus at $61.5 million, meaning that if the fiscal year ended in March the revenue surplus would be $365.5 million.

MARCH COLLECTIONS
March revenue totaled $694.6 million, up 8.8% compared with March 2025 and 8.7% above the budget forecast. Following are March collections in the key categories.

Income tax
March 2026: $315.9 million
March 2025: $281.9 million
up 12.1%, 9.8% above budget forecast

Sales tax
March 2026: $304.6 million
March 2025: $275.5 million
up 10.6%, 13.1% below budget forecast

Corporate income tax
March 2026: $24.7 million
March 2025: $26.9 million
down $2.2 million, $900,000 above budget forecast

“Last year, some sales tax revenues were shifted from March to February,” the DFA noted about March collections. “This year, partly due to the winter storm of late January, which shut down many businesses, some revenues were shifted from February to March. As a better comparison, the two-month total of collections this year over last year grew 3.5%.”

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 2025-March 2026: $132.3 million
July 2024-March 2025: $137 million

Insurance
July 2025-March 2026: $94.6 million
July 2024-March 2025: $93.7 million

Alcoholic beverages
July 2025-March 2026: $54.1 million
July 2024-March 2025: $55.2 million

Games of skill
July 2025-March 2026: $45.3 million
July 2024-March 2025: $42.9 million

Severance
July 2025-March 2026: $6.7 million
July 2024-March 2025: $8.1 million