Arkansas tax revenue in the first two months of the fiscal year (July-August) is $1.23 billion, up 3.5% from the same time last year thanks in large part to an 8.5% increase in sales and use tax collections. The year-to-date tax revenue is also 3.3% above the budget forecast.
After ending the previous fiscal year in June with a $1.62 billion surplus, the surplus after the first two fiscal months is $46 million, according to Friday’s report from the Arkansas Department of Finance and Administration (DFA).
Individual income tax revenue in the first two months was $518.5 million, up 2.3% compared to the same period in 2021, and 1% above the budget forecast. Sales and use tax revenue in the first two months was $560.5 million, up 8.5% compared with the same period in 2021 and up 6.9% above the forecast. Corporate income tax revenue was $42.1 million, down $9 million compared to the same period in 2021, and 0.5% below the forecast.
“Most major reporting sectors of Sales tax displayed high growth over the prior year, reflecting continuing economic expansion in many sectors. Motor vehicle sales tax collections were up 8.0 percent from year ago August,” John Shelnutt, DFA administrator of economic and tax research, noted in Friday’s report.
August revenue was $614.7 million, 4.4% more than August 2021 and 3.6% above forecast. August individual income tax revenue was $265.4 million, up 0.1% compared to August 2021 and 1.4% above forecast. August sales and use tax was $288.1 million, up 12.3% compared with August 2021, and 9.2% above forecast. The corporate income tax revenue in August was $7 million, down $4.2 million compared to August 2021 and $2.2 million below forecast.
Some of the sales tax gain is driven by inflation. The July Consumer Price Index, posted Aug. 10 by the U.S. Bureau of Labor Statistics, reported that all indexed items were up 8.5% in July compared to July 2021.
Total tax revenue in fiscal year 2022 (August 2021-June 2022) was $8.773 billion, up 8% – or $651.2 million – compared with a robust fiscal year 2021 in which the tax surplus was $945.7 million.
OTHER REVENUE SOURCES
Tobacco
July-August 2022: $35.9 million
July-August 2021: $38.7 million
Alcoholic beverages
July-August 2022: $13.2 million
July-August 2021: $13.7 million
Games of skill
July-August 2022: $8.7 million
July-August 2021: $7.1 million
Insurance
July-August 2022: $21.2 million
July-August 2021: $20.9 million
