State Revenues Strong In September

Arkansas finance officials released tax collection figures that show a healthy uptick in September, the end of the first quarter of the fiscal year.

Year-to-date net available general revenues totaled $1.21 billion, $31.9 million or 2.7% above year ago levels. After three months into the fiscal year, net available revenues are $15.8 million, or 1.3% above forecast.

Strong individual and income tax collections fueled the surge, but all eyes were on gross receipts as the state’s first sales tax holiday numbers were recorded.

Individual income taxes were 6.7% higher than one year ago, while corporate income taxes rose 5% above last year’s September. Gross receipts jumped 5.5% after several sluggish months that saw small increases or actual declines.

However, Department of Finance and Administration officials were cautious in assessing the impact of the sales tax holiday, which took place in August and resulted in exemptions on certain back-to-school items.

"Interpretation of the sales tax results with the sales tax holiday requires several adjustments for comparison to year ago results and the impact estimates. Businesses are only required to report total taxable sales for sales tax purposes and are not required to separately report exemptions. This is to minimize the taxpayer burden of compliance, subject to audit verification," a DF&A memo stated.

"As a result, we do not have an exact figure for the new back to school holiday exemption. However, we have adjusted the reported taxable sales figures by the amount that we estimated for the exemption, $2.1 million total and $1.5 million general revenue.  With this adjustment taxable sales had a slow positive growth rate as we estimated. This indicates that our actual experience was in line with our estimate," the memo added.