Sales, Income Taxes Boosts Arkansas May Take

Higher-than-expected collections from Arkansas’ state income and sales taxes in May mean fiscal 2013 net revenue has fully funded the budget with another month left in the year.

Net available revenue in May totaled $334.2 million, down $2 million from May 2012 but $8.4 million more than expected.

Sales tax collections of $184 million were up 7% from May and beat expectations by $12 million.

“Results were mainly driven by rebound in sales tax collections,” said chief economist John Shelnutt in the report.The individual income tax generated $201 million in May, almost $4 million above the official forecast.

Last week’s report from the Department of Finance and Administration shows a surplus to-date of at least $172 million. The ending surplus on July 1 could be more than $200 million, said deputy director Tim Leathers. Net revenues in the first 11 months of fiscal 2013 total $4.5 billion, exceeding the official forecast and last year’s collections.

Gov. Mike Beebe said the increased collections indicate the state’s economy is getting healthier.

“Withholding is up, which means people are working,” Beebe said. “We’ve got more people working and making more money. It’s a stable trend and the one you really do like to see.”

As more people go back to work, Beebe said, sales tax collections should rise along with the income tax.

“People are still a little bit cautious about spending money,” he said. “If work and income tax continues to be steady and on an upward trend, then you’ve got to believe ultimately they’ll start spending more money.”

Since fiscal 2013 began in July 2012, the individual income tax has generated $2.86 billion, an increase of 8.2% from the same period of 2012 and 6% above expectations.

Collections from the sales tax total $1.94 billion.

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Arkansas
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