With all key tax categories showing year-over-year gains through 11 months of Arkansas’ fiscal year, state officials project a fiscal-year end budget surplus of $1.473 billion, according to Thursday’s (June 2) revenue report from the Arkansas Department of Finance and Administration (DFA).
The fiscal year-to-date revenue is $7.876 billion, up 8.5% compared with the same period in 2021 and up 0.1% above a forecast that was revised May 18.
Individual income tax revenue in the first 11 fiscal months was $3.832 billion, up 5.3% from the same period in the previous fiscal year, and 0.1% above the revised budget estimate. Sales and use tax revenue, an indicator of consumer spending, was $2.868 billion in the first 11 months, up 9.2% compared with the previous fiscal year and $1.3 million above the revised budget forecast.
Fiscal year-to-date corporate income tax revenue totaled $703.7 million, up $166.8 million compared with the previous fiscal year and $1.2 million above the revised budget forecast.
“Corporate Income Tax collections were above forecast, largely from Extension Payments for prior tax year liability. Sales Tax collections were below year ago and slightly below forecast, reflecting adverse comparison with the surge in consumption last May,” John Shelnutt, DFA administrator of economic and tax research, noted in the report.
For example, motor vehicle sales tax was down 10.8% from a “spike in vehicle sales and collections last May,” he said.
Arkansas ended fiscal year 2021 (July 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 May that pushed some of fiscal 2020 income tax payments into 2021.
MAY REVENUE
Gross revenue in May was $645.4 million, down 21.6% compared with May 2021 and 1.8% above the revised forecast. Individual income tax revenue was $303.6 million, down 35.6% over May 2021 and 1.9% above the revised forecast. May income tax decline related to the income tax being due in April this year but in May of last year, Shelnutt said.
Sales and use tax revenue in May was $261.9 million, down 4.5% compared with May 2021 and $1.2 million above the revised forecast. Corporate income tax revenue was $45 million, up $4.3 million compared with May 2021 and $1.2 million above the revised forecast.
