State Tax Collections Flat In November, Down $27 Million On The Year
LITTLE ROCK (KFSM) — State tax collections in November were mostly flat ahead of the all-important Christmas shopping season as Arkansas households appear reticent to hike spending during the holiday although consumer confidence across the U.S. is near 16-year highs.
Through November, the fifth month of the state’s 2018 fiscal year that began July 1, year-to-date available general revenues were $2.17 billion, up 1%, or $20.8 million above year ago levels.
However, revenue collections were down 1.2%, or $26.8 million below forecast from July to November.
Despite the flat collections, Arkansas saw “good growth” in payroll withholding tax collections that reflect a solid job market, said John Shelnutt, director of economic analysis and tax research for the state Department of Finance and Administration (DFA).
Shelnutt said sales tax collections in November were above year ago by 2.8%, but slightly below forecast due to large refunds processed this month.
In December, Shelnutt said certain timing factors that will give Arkansas consumers an extra day and four Saturday shopping days between Thanksgiving and Christmas Day should boost overall sales tax revenue in the first half of fiscal 2018.
State budget officials also expect higher e-commerce collections compared to a year ago after Amazon decided in March to begin collecting sales taxes for online purchases from existing retailers with a nexus, or physical presence in Arkansas, he said.
“We expect good holiday shopping results to be reflected in December and January reports from very good economic indicators locally and nationally as well as timing factors favoring this shopping season,” Shelnutt said.
“At the economic level, total payroll income gains at 4.5% year-to-date and 4.8% in November suggest retail growth of about 3.5% and in-line with national retail industry expectations.”
The Arkansas Revenue Stabilization Act mandates a balanced budget to provide appropriate funding levels for all the state’s major priorities under Gov. Asa Hutchinson’s $5.5 billion budget for fiscal 2018.
The Arkansas General Assembly’s biennial fiscal session begins in February where lawmakers will consider budget requests for fiscal year 2019 and consider other financial matters concerning the state’s operations.
Arkansas voters approved a constitutional amendment in November 2008 that requires the legislature to convene in fiscal sessions in even-numbered years.
The fiscal session will last 30 days, unless extended by a 75% vote of each chamber. The fiscal session cannot be extended any more than 15 days, so the longest fiscal session allowable is 45 days.
To see more tax data for 2017, visit Arkansas Talk Business & Politics.