LITTLE ROCK Arkansas finance officials say tax revenue in January beat last year’s numbers, despite a drop in sales-tax collections.
The Department of Finance and Administration said Monday that the state’s net available revenue totaled $516 million in January. That’s 12 percent higher than last year and 13.5 percent above what officials had forecast.
Officials said the bulk of the increases were driven by a 10 percent jump in individual income-tax collections as some taxpayers sought to shift their income into tax year 2012 to avoid rate increases this year.
Sales and use taxes were down 1 percent in January, which was 5 percent below expectations.
Corporate income-tax collections were up 6.7 percent from last year, exceeding the forecast by 2.5 percent.
The bulk of the overall increase in net revenue was driven by a 10 percent jump in individual income tax collections, as some taxpayers sought to shift their income into tax year 2012 to avoid rate increases this year, according to Richard Weiss, the director of the Department of Finance and Administration. In addition, he said, delays in federal tax filing dates resulted in fewer refund claims at the state level.
“With the combination of those two things, we have this kind of artificial bubble in this month’s collections. It was higher on the income side and less payouts on the refund side,” he said. “A lot of that will take care of itself over the course of the next several months.”
Gov. Mike Beebe cautioned against using the figures to draw any conclusions about the longer-term budgetary outlook.
“It looks really, really good,” he said. “However, there’s an anomaly in it that will bring it back down, so you’ll see the refunds come in at a greater number in the coming months. So you have to temper your optimism with that.”
Beebe said that while increases in the income tax shows that people are working, he was troubled by decreases in sales and use tax collections, which underperformed the state’s forecast by 5 percent.
The Department of Finance noted in a news release that the effects of the December 2012 storm and parts of the holiday shopping season were reflected in this month’s data.
Read tomorrow's Arkansas Democrat-Gazette for full details.