December Corporate Tax Boost Aids State Revenue Picture

A big jump in December corporate tax collections and slower refund claims to individuals and businesses boosted Arkansas revenue coffers at the six-month mark of the state’s fiscal year.

The Department of Finance and Administration’s monthly revenue report showed year-to-date net general revenues just under $2.6 billion – a 3.3% increase from one year ago and 1.7% above forecast.

At the halfway mark of the state’s fiscal year, revenues are $83.4 million above last year and $44.1 million above forecast.

December net available general revenues totaled $482.8 million, $10.7 million or 2.3% above last year and $19.3 million or 4.2% above forecast. Corporate tax collections accounted for $85.4 million of that number, an increase of $21.7 million from year ago and $21.1 million above expectations.

“December results were above forecast from a combination of gains in Corporate Income tax collections and tax refund payments running below expectation in both Corporate and Individual Income tax,” said John Shelnutt, director of DFA’s Economic Analysis and Tax Research Division.

Shelnutt warned however that some revenue sectors offered mixed results.

“Collections in the two largest revenue categories were below forecast. Sales Tax collections were 1.1 percent below forecast (-$2.1 million) and Individual Income tax was below forecast by 2.6 percent (-$6.1 million),” he said. “Among smaller revenue sources, tobacco was above forecast but below year ago levels. Gaming results were below forecast, potentially due to collection timing and reporting issues.”

A breakdown of the major categories year-to-date totals include:

Year-to-date Net Available General Revenues: Year-to-date net available general revenues total $2,598.9 million, $83.4 million or 3.3 percent above year ago levels. At the halfway mark into the fiscal year, net available revenue is above forecast by $44.1 million or 1.7 percent.

Year-to-date Individual Income Taxes: Year-to-date individual income tax collections total $1,403.9 million, $43.0 million or 3.2 percent above last year’s collections and $6.1 million or 0.4 percent above forecast. Collections for individual withholding are up 4.2 percent from year ago levels.

Year-to-date Corporate Income Taxes: Year-to-date corporate revenues total $224.4 million, an increase of $20.8 million or 10.2 percent from year-to-date in the prior year. Corporate income is above forecast by $19.9 million or 9.7 percent.

Year-to-date Sales and Use Tax Collections: On a year-to-date basis, sales and use taxes total $1,110.2 million, an increase of $9.4 million or 0.9 percent from last year and $1.4 million or -0.1 percent below forecast.

You can access the full DFA revenue report here.