State revenues for July down from last year, below forecast


LITTLE ROCK — State revenues in July were 1.7 percent below last year and 2.4 percent below forecast, the state’s fiscal office said Friday.

Arkansas’ net available revenue in July, the first month of the fiscal year, was $403.1 million, which was $7.1 million below July 2013 and $9.8 million below forecast, according to the monthly revenue report by the state Department of Finance and Administration.

Revenues were down mainly because of declines in corporate income tax and sales tax collections and an increase in income tax refunds, DF&A said.

Individual income tax collections were on forecast and smaller revenue sources were mostly above forecast and July 2103 collections, the agency said.

Corporate income tax collections in July totaled $18.4 million, which was $8.5 million below a year ago and $9.7 million, or 34.6 percent, below forecast. Collections in this category typically fluctuate from month to month, said John Shelnutt, director of economic analysis and tax research for DF&A.

“Multiple corporations, they have all different types of fiscal-year schedules, so this is a random event that periodically hits either negative or positive,” he said.

Corporate income tax refunds in July totaled $1.3 million, which was about $500,000 above a year ago and 41.4 percent above forecast.

Sales and use tax collections last month totaled $185.5 million, which was down about $500,000, or 0.3 percent, from July 2013 and $7.6 million, or 3.9 percent, below forecast.

“That’s a continuing problem,” Shelnutt said.

He noted that sales tax collections on motor vehicles were down in July but said national figures show an increase in car sales — likely driven by car dealers’ summer incentives — which suggests that tax collections on vehicles may improve in Arkansas this month. Car buyers have up to 30 days to pay taxes on their vehicles, so tax collections lag behind car sales by up to a month, he said.

Sales taxes on utilities also were down, probably because of unusually mild weather for July, and retail sales taxes were “weak,” Shelnutt said.

Individual income tax collections in July totaled $213.2 million, which was $7.3 million, or 3.5 percent, above a year ago and about $200,000, or 0.1 percent, above forecast. Individual withholding increased by 4 percent from July 2013, which Shelnutt said is good news for the state economy because it indicates an increase in Arkansans’ income.

“It would also imply that sales tax collections would not be weak over an extended period, because they have the income to prop up sales tax growth going forward,” he said.

Individual income tax refunds last month totaled $10.4 million, which was up $2.7 million, or 35.2 percent, from July 2013 and $2.5 million, or 31.3 percent, above forecast.