Arkansas Revenue Report for August, 2007

This is the second monthly report of the new fiscal year, and the effects from the July 1 grocery tax cut are beginning to show, even against the forecast. Collections of net available general revenues for August were $334.5 million. That is down 2.8% from August, 2006 and 1.2% below forecast.

Gross receipts collections for August, which include sales/use taxes, totaled $179.3 million (about 5.2% below August, 2006 and 1.3% below forecast). Gross receipts are a key indicator of consumer spending, which comprises roughly two-thirds of economic activity.

Individual income tax collections are 0.2% below projections (but 3% above August, 2006) and corporate income tax collections are 22.5% above forecast but 47% below August, 2006. Collections of individual income tax returns came in at $155.7 million, and corporate income tax collections were $7.6 million. The absolute decline in corporate income tax collections was caused by nonrecurring gains in the August, 2006 collections. This nonrecurring impact was anticipated in the forecast.

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