Arkansas’s state tax revenue exceeded expectations last month as $477.9 million came in, marking a record for December collections with more than $46.4 million above what was anticipated.
The Department of Finance and Administration said in its monthly revenue report that collections in December 2007 were $50.5 million higher than the $427.4 million collected in December 2006. The department said the higher-than-expected revenue was due to large gains in individual tax withholding in December and strong corporate income tax collections.
General fund revenue in the first six months of fiscal 2008 totaled $2.6 billion. That is $93.8 million above the same period in fiscal 2007 and $99.9 million over the forecast.
Net revenue, which is the amount available to state agencies after distributions such as income tax refunds, totaled $415.2 million for the month, up $29.3 million over December 2006 and $50.2 million above the forecast. Fiscal year-to-date net was $2.2 billion, a $26 million increase over fiscal 2007 and $97.1 million above the forecast.
Individual income taxes brought in $222.3 million in December and corporate income taxes generated $58.1 million. Gross receipts, which are primarily sales and use taxes, totaled $178 million, matching the forecast.
The state sales tax on groceries was lowered to 3 % from 6% on July 1. The grocery tax cut is expected to reduce general revenue by $90.8 million in fiscal 2008.
Other parts of what was the largest tax cut in state history included lowering Arkansas sales tax on energy used by manufacturers to 4.5% from 6%, which will reduce general revenue by $15 million, and exempting off-road diesel from the sales tax, which is expected to reduce revenues by $10.6 million.
