Arkansas' general revenue tax collections saw higher-than-expected growth across all major revenue categories last month, officials said Monday.
According to the state Department of Finance and Administration's March revenue report, general revenue tax collections increased by $121.7 million, or 21.4% over last year, to $691.5 million.
Individual income tax collections topped the state's forecast by $80.7 million, or 34.9%, totaling $312.2 million in March. Those collections increased by $25.7 million, or 9%, compared with last year.
The tax collections for March 2022 of $691.5 million beat the forecast for the month by $162.4 million.
Last month's gross general revenue was the highest of any March on record, according to the state Department of Finance and Administration. The previous high was set in March 2019, tax analyst Whitney McLaughlin said.
"Revenue gains beat the monthly forecast by a wide margin in March in all major categories," state Department of Finance and Administration Secretary Larry Walther said Monday. "We are matching and in fact exceeding the stimulus-driven gains made this time last year. Year-to-date sales tax collection has increased 13.2% from the same period last year."
John Shelnutt, the state's chief economic forecaster, said last month's revenue report shows "surprisingly good rates in our key indicators" of economic growth.
Shelnutt said the report showing high growth in payroll withholding last month reflects continued labor market strength despite comparisons to last year's federal pandemic-related stimulus checks.
"We did not expect bonuses to repeat this year in the forecast, but it looks like wage inflation and continued bonuses are producing that growth," he said.
Sales and use tax collections totaled $283.3 million last month, an increase of $70.6 million or 33.2% over last year. That was $53.6 million or 23.3% above monthly forecast levels.
Shelnutt said the growth in March's sales tax collections compared to last year was very high. He said part of that was due to last year's numbers being affected by a week of snow in February.
The state's corporate income tax collections were also well above forecast last month, totaling $40.5 million, which was $25.9 million above the forecast and an increase of $16.1 million from a year ago.
Motor vehicle tax collections were down 6.8% from last year, which was largely because of the spike in vehicle sales and collections in March 2021, according to the finance department.
"I think that that reflects inflation in motor vehicles this year and continued growth in the economy, so it could have been worse," Shelnutt said.
March's revenue report also showed the year-to-date net available revenue is above forecast by $456 million.
In a written statement, Gov. Asa Hutchinson said state revenue is on track to get close to $600 million by the end of the fiscal year.
"Our state revenue continues to exceed projections, and the cumulative budget surplus after 3 quarters is on target to approach $600 million by June 30," Hutchinson said.
That isn't a surprise, the Republican governor added.
"This is expected and if the economy continues to grow at this pace, then we will need to consider alternatives to provide financial relief to the taxpayers who are struggling with record high gas prices and inflation," he said.