The state’s revenue forecast looks rosier thanks to a strong month of sales tax collections in February. Monthly sales tax collections spiked 5.7% above last year and 5% above forecast to bring in $176.5 million for the month.
The increase boosted year-to-date net available general revenues to more than $3.338 billion, up $127.2 million or 4% above year ago levels. After eight months into the fiscal year, net available revenue is above forecast by $94.6 million or 2.9%.
“Results in February were above forecast as a result of better than expected collections in sales and use tax and lower than expected income tax refunds. Sales and use tax revenue grew 5.7% compared to year ago results and 5% above forecast,” said John Shellnut, head of Economic Analysis & Tax Research for the Arkansas Department of Finance and Administration.
For February, individual income tax collections were lower than forecast, but Shellnut said their was seasonality in the timing of filings that would eventually smooth out.
“The lower tax refunds result for the month is a continuation of the timing effects from the earlier start of IRS electronic filings of tax returns than in the prior two years. This earlier start effects both year ago and forecast comparisons over the course of the income tax filing season,” he said.
Other income categories on a year-over-year basis: Year-to-date Individual Income Taxes:
- Year-to-date individual income tax collections total $1.971 billion, $63.0 million or 3.3 percent above last year’s collections and $22.6 million or 1.2 percent above forecast. Collections for individual withholding are up 3.4 percent from year ago levels.
- Year-to-date Sales and Use Tax Collections: On a year-to-date basis, sales and use taxes total $1.48 billion, an increase of $33.6 million or 2.3 percent from last year and $18.0 million or 1.2 percent above forecast.
- Year-to-date Corporate Income Taxes: Year-to-date corporate revenues total $262.2 million, an increase of $22.2 million or 9.2 percent from year-to-date in the prior year. Corporate income is above forecast by $25.8 million or 10.9 percent.
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