The growth of year-to-date tax collections in Arkansas is on a downward trend, and the February gross revenue number was below the budget forecast. The February report also showed a continued decline in collections related to consumer spending.
Year-to-date gross revenue (July 2013-Feb. 2013) totaled $3.909 billion, 2.3% above the same period last year and above forecast by 0.5%, according to the report issued Tuesday (March 4) by the Arkansas Department of Finance and Administration.
The gross collections were up 3.4% after the first six months of the fiscal year, and 0.9% above forecast. After the first four months of the fiscal year, the gross revenue was up 4.1%.
Individual income tax collections for the fiscal year totaled $1.907 billion, up 2% from last year and 1.1% above the budget forecast. Year-to-date sales and use tax collections were $1.446 billion, up 2.4% above last year and 1.6% below the budget forecast. The sales and use tax collections were up 4.8% four months into the fiscal year and up 3.9% six months into the fiscal year. Income taxes and the sales and use tax collections are the two primary sources of state revenue.
The corporate income tax collections for the first eight reporting months of the fiscal year totaled $240 million, up 5.7% compared to last year and 4.5% above forecast.
FEBRUARY NUMBERS
February gross revenue was $427.3 million, up 3.9% above last year and 0.7% below forecast.
John Shelnutt, head of the Department of Finance and Administration’s Economic (DFA) Analysis & Tax Research division, provided this analysis of the February numbers: “Results were significantly impacted by: 1) decline in Sales and Use tax compared to year ago and versus forecast, 2) higher-than expected growth in individual refunds due in part to delayed start of the tax filing season in January, and 3) a positive contribution from temporary effects of payroll timing for Individual Withholding tax. ... Sales and Use tax collections in February largely reflect economic activity in January. Weather effects on collections were noted in the retail sector.”
Individual income tax collections during February totaled $226.7 million, up 14.4% compared to February 2012 and above forecast by 7%. Sales and use tax collections during the month totaled $167 million, down 4.3% from last year and 7.6% below the forecast.
Sales and use tax collections, considered a barometer of consumer confidence, ended fiscal year 2013 on a down note. Collections in the segment for the fiscal year totaled $2.124 billion, up just 1.1% compared to the 2012 period, and 1.4% below forecast.
The DFA in early December updated the projections for 2014 and 2015 fiscal year revenue. Gross general revenues are estimated at $6.203 billion for the current fiscal year (July 1, 2013-June 30, 2014), down about 0.2% from fiscal 2013 collections.
The revenue forecast for fiscal year 2015 is $6.333 billion, up just 2.1% above the 2014 estimate. The 2015 estimate includes an anticipated reduction of $85.2 million from tax cuts approved in the 2013 Legislative Session.
OTHER TAX COLLECTIONS
Alcoholic beverage
July 2013 - Feb. 2013: $33.8 million
July 2012 - Feb. 2012: $32.7 million
Games of skill
July 2013 - Feb. 2013: $24.8 million
July 2012 - Feb. 2012: $21.8 million
Tobacco
July 2013 - Feb. 2013: $146.8 million
July 2012 - Feb. 2012: $150.5 million
Insurance
July 2013 - Feb. 2013: $45.8 million
July 2012 - Feb. 2012: $43.2 million
COLLECTIONS HISTORY
Tax collections during fiscal year 2013 (July 2012-June 2013) totaled $6.214 billion, up 4.9% above the previous fiscal year and up 2.5% compared to budget estimates. One result of the gains was a budget surplus of $299.5 million.
Fiscal year 2013 marked the third consecutive year of year-over-year gains. Arkansas tax collections reversed a negative two-year slide in the 2011 fiscal year, with collections up 4.5% in the July 2010-June 2011 period.
State tax collections for fiscal year 2011 totaled $5.673 billion, up 4.5% above the $5.43 billion in the 2010 period.
The biggest declines in the 2009 and 2010 fiscal years were with individual income tax collections and sales and use tax collections.