The monthly report on Arkansas tax collections in April was in keeping with the announcement yesterday that the annual forecast was being revised upward because of improving economic conditions.

But the whopping increase in net revenue is a little misleading. They were up by 15 percent over the same month a year ago and up 14.2 percent over the forecast. But, said the Department of Finance and Administration:

Advertisement

Results were mainly driven by high growth in individual income tax. Much of the increase in recent collections represents income shifted to Tax Year (TY) 2012 and paid in FY 2013 revenue. Larger than anticipated payments with filing extensions and returns received in April for Tax Year 2012 resulted from taxpayer strategy and improved
business earnings. Other states and the IRS are reporting similar results this month.

The categories affected by this pattern in April were returns and extensions with payments. The gain included multiple types of activity, including tax shift strategy, expedited returns processing compared to year ago, and one-time business transactions. Expedited returns processing potentially pulled activity from May collections into April. In other income tax categories, collections growth in withholding was modest and estimated payments were down.

And here’s more downside, a bellwether of econmomic activity, the sales and use tax:

Sales and Use tax collections were below forecast by $12.0 million or -6.5 percent and also below year ago levels. A variety of factors relate to ongoing weakness in sales and use tax receipts, including slow job and income growth, low inflation, and the diversion effect on taxable sales from elevated motor fuel costs to consumers in recent months.

I do wonder how much the migration to on-line sales, much of it with retailers who don’t currently collect Arkansas sales taxes, affects this segment of the revenue picture, as opposed to economic conditions.

Advertisement

Here’s the full report.

Arkansas Times: Your voice in the fight

Are you tired of watered-down news and biased reporting? The Arkansas Times has been fighting for truth and justice for 50 years. As an alternative newspaper in Little Rock, we are tough, determined, and unafraid to take on powerful forces. With over 63,000 Facebook followers, 58,000 Twitter followers, 35,000 Arkansas blog followers, and 70,000 daily email blasts, we are making a difference. But we can't do it without you. Join the 3,400 paid subscribers who support our great journalism and help us hire more writers. Sign up for a subscription today or make a donation of as little as $1 and help keep the Arkansas Times feisty for years to come.

Previous article Feel like praying? Send Huck some bucks Next article Arkansas Republicans hate on Nancy Pelosi, in LR today