Arkansas Tax Revenue Surplus More Than $700 million; Year-To-Date Collections Up 11%
Calendar shifts with tax filing, an improving economy and federal stimulus payments helped boost April tax revenue almost 20% more than the forecast, and pushed the state’s year-to-date revenue surplus – “net available revenue” collected beyond the estimate – to $716.8 million.
The Arkansas Department of Finance and Administration (DFA) reported Tuesday that gross revenue for fiscal year-to-date (July 2020 to April 2021) is $6.43 billion, up 11.1% compared with the same period in 2019-2020 and up 12.4% over the budget forecast. Part of the gain includes a shift in collections when the 2020 tax due date was moved from April to July, according to the DFA report.
Individual income tax revenue was $3.168 billion in the first 10 fiscal months, up 10% compared to the same period in 2019-2020 and up 10.1% over the budget forecast. Sales and use tax revenue – an indicator of consumer spending – during the first 10 months was $2.352 billion, up 11.5% compared with the same period in 2019 and up 11.7% above budget forecast.
Corporate income tax revenue during the first 10 months of the fiscal year was $496.3 million, up $92.5 million compared with the same period in 2019-2020, and up 37.6% from the budget forecast.
“Sales Tax and Corporate Income Tax exceeded forecast and year-ago levels by wide margins. Collections from Individual Income Tax filings were above a year ago due to filing date changes last year during the onset of the pandemic. Payroll Withholding Tax collections exceeded expectations amid economic rebound, income tax reduction, and withholding formula changes tied to rate changes,” John Shelnutt, DFA director of economic analysis and tax research, noted in a memo with the April report.
Gross revenue in the month totaled $947.8 million, up 37.8% compared with April 2020, and 19.3% above the forecast.
Individual income tax revenue totaled $470.9 million in April, up 28.5% compared with April 2020, and 0.5% above the forecast. Sales and Use tax revenue in April totaled $288.8 million, up 48.5% compared with April 2020 and up 39.5% above the forecast. Corporate income tax revenue was $151.8 million in April, up $53.2 million compared with April 2020, and $63.2 million above the forecast.
Shelnutt said an 84.6% increase in auto sales tax revenue in April was part of a broad increase in consumer spending.
“Most major reporting sectors of Sales Tax displayed double-digit percentage growth over the prior year, reflecting a combination of relative weakness in sales during the onset of the pandemic and continuing expansion with stimulus payments in recent months,” he noted in the memo.
The previous fiscal year (July 2019-June 2020) ended with $369.4 million in net available revenue more than expected. Fiscal year 2020 tax revenue ended down just 2.5% despite several months in early 2020 of economic disruption resulting from COVID-19 shutdowns. The revenue was 4.1% above the revised forecast. Gross revenue in the previous fiscal year was $6.967 billion, 2.5% below fiscal year 2019, but up $272.5 million more than the forecast.