LITTLE ROCK — Arkansas tax collections last month were 2.6 percent above forecast but 0.6 percent below May 2012, the state Department of Finance and Administration reported Tuesday.
DF&A Deputy Director Tim Leathers said the increase in the monthly forecast was fueled mostly by a rise in sales tax collections, $4.7 million or 2.6 percent above the monthly forecast and $12 million or 7 percent above last year.
“After several months of being just flat or barely making the sales tax we got some pretty good growth in sales tax,” Leathers said, adding that sales tax collections on car sales were up during the month.
“It’s good to see a month where we’re ahead in sales tax,” he said, adding that overall the revenue report was on forecast.
Individual income tax collections also contributed to collection gains in May as withholding collections continued to perform well at 4.7 percent above last year and 1.9 percent or $3.8 million above forecast, Leathers said.
Income tax refunds for both individual and corporate categories were also above forecast in May, $5.5 million or 16 percent above forecast and $7 million or 21.2 percent above last year.
Leathers said the individual refunds continued to catch up to expected levels for the year after delays in IRS processing early in the filing season.
Corporate income tax collections totaled $22.8 million in May, $700,000 or 3 percent above the monthly forecast and up $1.8 million from last year.
In early May, the state’s fiscal office increased state revenue projections for the rest of the current fiscal year and the next, reflecting both modest economic growth and tax changes that go into effect for the budget period that begins July 1.
The report to the Legislature revised the current revenue forecast upward by about $38 million, increasing the projected state surplus from about $99 million to $137.7 million by the end of the fiscal year on June 30.
“There may be — and we won’t know until we close out this month with all the refunds and everything — there may be another $80 to $100 million on top of that this year,” Leathers said, adding the surplus could rise above $200 million.