November 2023 Revenue Report

NOVEMBER STATE REVENUE BEATS LAST YEAR AND FORECAST

The Arkansas Department of Finance and Administration (DFA) reported today that November revenue exceeded collections of last November even after recent Income Tax cuts. Net General Revenue was $1.3 million above last November. Revenue exceeded forecast by $28.3 million or 6.4%. This added to the surplus previously accumulated in the first four months of the fiscal year and brings the total year-to-date surplus to $144.1 million.  

DFA reported that November tax collections were above forecast in all major categories. This factor along with revenue exceeding the same month last year after income tax changes tends to indicate that the Arkansas economy remains positive even with recent reports of slightly higher unemployment rates.  

November Individual Income Tax was $2.0 million more than last November after absorbing recent tax reductions. Individual Withholding Tax was the category directly impacted by the recent income tax cuts when tax tables were adjusted to lower the amount of tax withheld from paychecks. Withholding income tax increased 1.7% over last November. Total Individual Income Tax came in $6.6 million or 2.7 above forecast.

DFA reported that “Major reporting sectors of Sales Tax displayed mostly higher growth over the prior year, reflecting continuing economic expansion in many sectors”. This resulted in Sales and Use Tax exceeding forecast by $17.0 million or 5.3%. November results do not reflect a substantial portion of holiday sales since tax collections lag retail sales. Most of the holiday sales tax collections will be reported in December and January. Motor vehicle sales tax collections were up 14.6% over last November.

November Corporate Income Tax collections totaled $12.2 million in a minor reporting month. This was an increase of $2.2 million above last November and was $3.4 million above forecast. 

November tax collections were positive in numbers and positive in economic indicators. With taxes up in all major categories, exceeding actual collections last November and exceeding forecast, all economic indicators appear positive. This has occurred with taxes having been reduced. It also reflects periods of slightly higher unemployment rates. Arkansas taxpayers continue to earn more income than expected and to spend more money than expected by the forecast. Sales tax reported the next two months will give a clearer picture on major holiday spending results and consumer economic behavior. 

The November 2023 revenue report may be viewed and downloaded here.