An improving hotel and restaurant economy and rising motor vehicle sales helped drive Arkansas’ tax revenue up 7.1% in February, with revenue since the start of the year (July 2021 to February 2022) up 6% to $5.206 billion.
Year-to-date revenue is also up 8.9% from budget, according to the Wednesday (March 2) report from the Arkansas Department of Finance and Administration (DFA). The year-to-date gain translates to $293.8 million for the state, above budget expectations.
“Revenue growth in February exceeded expectations as claims began to increase during the current tax filing season,” DFA Department Secretary Larry Walther said in a statement. “Year-to-date revenue growth remains strong in key categories. A sign of wage growth in Arkansas, payroll withholding gains were higher than expected. This follows implementing the first stage of the largest income tax cut in state history on January 1.”
Arkansas ended fiscal year 2021 (July 2020 – June 2021) with a revenue surplus of $945.7 million, due in part to the COVID-19-induced change in a June tax filing deadline to February which pushed back some of the income tax payments for fiscal year 2020 to 2021.
Personal income tax revenue for the first eight months of the fiscal year was $2.406 billion, down 0.2% from the same period a year earlier, but 8.9% more than the budget estimate. John Shelnutt, administrator of economic and tax research at the Arkansas Department of Finance and Administration, said the revenue picture was still affected by previous changes to tax filing deadlines.
“Tax due date changes account for the disparity from prior year levels, while estimated payments and payroll deductions account for most of the current earnings above forecast,” he noted. in the income report.
Sales and use tax revenue, an indicator of consumer spending, was $2.052 billion in the first eight months, up 10.9% from a year earlier and 2.6% compared to budget forecasts. The sales and use tax has generated $200.9 million of the budget surplus since the beginning of the year.
Year-to-date corporate income tax revenues totaled $408.2 million, up $88.2 million from the prior year and $35.7 million above budget forecasts.
Gross revenue in February was $528.5 million, up 7.1% from February 2021 and 13.4% above forecast. Personal income tax revenue was $264.8 million, up 11.1% from February 2021 and 26.8% above budget.
Sales and use tax revenue in February was $228.2 million, up 2.9% from February 2021 and 2.3% above forecast. Corporate income tax revenue was $7 million, up $1.7 million from February 2021 and $100,000 below forecast.
OTHER SOURCES OF INCOME
July 2021-February 2022: $144.4 million
July 2020-February 2021: $147.4 million
July 2021-February 2022: $47.6 million
July 2020-February 2021: $43.8 million
July 2021-February 2022: $27.7 million
July 2020-February 2021: $21 million
July 2021-February 2022: $51.4 million
July 2020-February 2021: $48.2 million