Arkansas tax revenue down 2% so far this fiscal year
Tax revenue in the first quarter of Arkansas’ fiscal year (July-September) is down compared to a record period in 2020, but collections are up almost 17% above forecast, and September revenue was almost 16% more than September 2020.
Revenue in the first three months of the fiscal year was $1.954 billion, down 2% compared with the 2020 period, according to Monday’s (Oct. 4) report from the Arkansas Department of Finance and Administration (DFA). The revenue is 16.9% above the budget forecast.
Arkansas ended fiscal year 2021 (September 2020 – June 2021) with a revenue surplus of $945.7 million thanks in part to the COVID-19 induced shift in a tax filing deadline from June to September that pushed some of fiscal 2020 income tax payments into 2021.
Individual income tax revenue in the first three fiscal months was $839.7 million, down 16.5% from the same period in 2020, but 19.4% above the budget estimate. Sales and use tax revenue, an indicator of consumer spending, was $775.5 million in the first three months up 10.2% compared with the 2020 period and 7.6% over the budget forecast.
“Tax payments in September accounted for much of the gain above forecast and year ago,” John Shelnutt, DFA director of economic analysis and tax research, noted in the report. “Sales Tax collection growth was broad based with a mix of rebounding sectors hit harder during COVID 19 and sustained growth in early-gaining sectors.”
Shelnutt said corporate tax payments are up 82.5% fiscal year-to-date, and up $68.1 million above forecast. He said auto sales are up 4.9% compared with September 2020.
Corporate income tax revenue totaled $191.1 million, up $56.9 million compared with the same period in 2020 and 68.2% million above the budget forecast.
“We have exceeded revenue forecasts for 31 consecutive months now,” Gov. Asa Hutchinson said in a statement. “This affirms that our economy continues to improve as we emerge from the COVID-19 pandemic, and that our decision to keep the economy open for business was important for our families and protected worker’s income. The surplus trend line puts Arkansas in good position to have another gradual reduction in the income tax rates.”
Gross revenue in September was $763.5 million, up 15.7% compared with September 2020 and 30.6% above forecast. Individual income tax revenue was $332.8 million, up 4% over September 2020 and 31.7% above the budget forecast.
Sales and use tax revenue in September was $259 million, up 12% compared with September 2020 and 9.9% above the forecast. Corporate income tax revenue was $140 million, up $62.4 million compared with September 2020 and $72.4 million above the forecast.