Arkansas began the new fiscal year with total tax revenue of $643.3 million in July, up 4.5% compared with July 2022 and 3.5% above the budget forecast, according to a report posted Wednesday (Aug. 2) by the Arkansas Department of Finance and Administration (DFA).
“All major collection categories were above forecast in July, led by Individual Income Tax at $13.0 million above forecast. Sales Tax collection growth was broad-based but notably above a year ago in Retail Trade, Motor Vehicles, and Restaurant sales. Corporate Income collections were above forecast across all subcategories of filings,” John Shelnutt, DFA administrator of economic and tax research, noted in Wednesday’s report.
Individual income tax revenue in July was $276.2 million, up 9.1% compared with July 2022 and 4.9% above the budget forecast. Sales and use tax revenue was $282.3 million, up 3.6% compared with July 2022 and up 0.6% above the forecast. Corporate income tax revenue was $31.2 million, down $3.9 million compared with July 2022 and $9 million above the forecast.
“Collections from motor vehicle sales tax were up 5.6 percent in July from year-ago levels. Collections from Accommodation and Food Services (restaurants) were up 10.7 percent from last year,” Shelnutt noted in the report.
Arkansas ended the previous fiscal year (July 2022-June 2023) with a $1.161 billion tax revenue surplus driven in large part by a more than 8% growth in sales tax collections. Total tax revenue in the fiscal year (July 2022-July 2023) was $8.85 billion, up 0.9% compared with the previous fiscal year and 1.7% more than the budget forecast.
The fiscal year surplus of $1.161 billion was the third consecutive year of a surplus of near or more than $1 billion. Total tax revenue in fiscal year 2022 (July 2022) was $8.773 billion, up 8% – or $651.2 million – and the budget surplus was $1.628 billion. The surplus in the fiscal year that ended June 2021 was $945.7 million.
