Income Tax Collections Give Arkansas Revenue Boost in December

Money rolling in from income tax collections gets the credit for giving the State of Arkansas's bank account a boost in December.

The collections grew by more than 17-percent from December 2011.

Year-to-date numbers are also on the rise in the latest revenue report from the Arkansas Department of Finance and Administration.

Here's the full report.

DECEMBER REVENUE SUMMARY

December Net Available General Revenues total $456.5 million, $37.8 million or 9.0 percent above last year and $17.5 million or 4.0 percent above forecast. Results were mainly driven by Individual Income tax collections which grew 17.4 percent compared to last year. Payroll timing shifts accounted for much of this gain, as seen in the 19.6 percent year over year gain in withholding. This observed volatility in the monthly pattern is largely canceled out in an annual context and in the official forecast. Estimated payments were only slightly above forecast with 1.2 percent year over year growth. Sales and Use taxes were up compared to last year by 2.5 percent but underperformed the forecast by -1.6 percent. Storm-related effects on collections will mainly be reflected in results for January. Corporate Income tax collections also underperformed the forecast in December with a -5.9 percent decline in year over year terms and -9.2 percent below forecast. Monthly collections in corporate income are a volatile component of general revenue.

December Gross General Revenues: December collections total $517.6 million, an increase of $36.4 million or 7.6 percent above last year and $10.8 million or 2.1 percent above forecast.

December Individual Income Tax collections total $243.0 million. Collections increased by $36.1 million, or 17.4 percent compared to last year. With respect to the forecast, collections are $20.1 million or 9.0 percent above forecast. Individual withholding increased 19.6 percent compared to last year, largely reflecting payroll timing shifts month to month and relative to last year.

December Individual Income Tax Refunds total $1.9 million, $5.6 million or -74.7 percent below last year and $5.9 million or -75.7 percent below forecast. Amounts below forecast for refunds contribute to gains in net available funds.

December Sales and Use Tax Collections: December collections total $180.9 million, an increase of $4.4 million or 2.5 percent from last year. Collections were below monthly forecast levels by $2.9 million or -1.6 percent.

December Corporate Income Tax collections total $62.8 million, a decrease of $4.0 million or -5.9 percent from year earlier levels, and $6.3 million or -9.2 percent below forecast.

December Corporate Income Tax Refunds total $7.1 million. This amount is $1.0 million or 15.6 percent above year ago levels. Refunds were below forecast by $0.9 million.

December Tobacco Tax collections, a small component of general revenue in annual terms, total $19.4 million. Collections decreased by $0.8 million or -4.2 percent below year earlier levels, but were fractionally above forecast. Monthly changes in tobacco tax collections can be attributed to uneven patterns of stamp sales to wholesale purchasers.

YEAR-TO-DATE REVENUE SUMMARY

Year-to-date Net Available General Revenues: Year-to-date net available general revenues total $2.4 billion, $90.8 million or 3.9 percent above year ago levels. Net available revenue is above forecast by $22.1 million or 0.9 percent.

Year-to-date Gross General Revenues: Year-to-date gross collections total $2.8 billion, representing an increase of $90.3 million or 3.3 percent above last year. Gross general revenues are above forecast by $14.8 million or 0.5 percent.

Year-to-date Individual Income Taxes: Year-to-date individual income tax collections total $1.3 billion, $87.2 million or 7.0 percent above FY 2012 collections and $25.0 million or 1.9 percent above forecast. Collections growth for individual withholding is up 6.3 percent over year ago levels.

Year-to-date individual income tax refunds total $51.8 million, down $0.8 million or -1.4 percent compared to last year and $2.9 million or -5.3 percent below forecast. Amounts below forecast contribute to net available funds.

Year-to-date Sales and Use Tax Collections: On a year-to-date basis, sales and use taxes total $1 billion, an increase of $4.7 million or 0.4% from FY 2012 and $3.5 million or -0.3 percent below forecast.

Year-to-date Corporate Income Taxes: Year-to-date corporate revenues total $191.4 million, a decrease of $12.5 million or -6.1 percent from year-to-date FY 2012. Corporate income tax is below forecast by $7.2 million or -3.6 percent.

Year-to-date corporate income tax refunds total $37.5 million, a decrease of $6.9 million compared to the same year-to-date period last year.

SPECIAL REVENUES OF NOTE

Year-to-date Soft Drink Tax (for Medicaid Program Trust Fund): Year-to-date collections of the dedicated soft drink tax total $23.0 million, a decrease of $1.0 million or -4.0 percent from last year.

Educational Adequacy Fund: Act 107 of the Second Extraordinary Session of 2003 increased the state sales and use tax rate from 5.125% to 6.0%, effective March 1, 2004. Effective July 1, 2004 a new sales tax on selected services went into effect in addition to an increase in vending machine decal fees. Act 94 increased the minimum corporate franchise tax and the tax rate, effective for calendar years beginning January 1, 2004.

The additional revenues are deposited as special revenues to the Educational Adequacy Fund to be used to fulfill the financial obligations of the state to provide an adequate educational system. In December 2012, $37.4 million was collected and deposited to the fund. After deductions, the net amount is $36.2 million. The monthly collection is equivalent to a 1.5 percent increase from prior year collections.

Source: http://arkansasmatters.com/fulltext?nxd_id=623692

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