Publication Sneak Peek

Our Two Cents

This segment features content from other AAEA publications. Our Two Cents is a monthly publication available to subscribing districts. The following excerpt comes from the April 2025 issue.

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Department of Finance & Administration General Revenue Report March 2025

The March revenue report from the Arkansas Department of Finance and Administration shows net available revenue results are above forecast in Individual and Corporate Income Taxes primarily due to Individual and Corporate Income Tax Collections being less than expected.

The monthly DFA report for March shows net available general revenue was $431.4 million, $20.6 million or 4.6 percent lower than last year and $26.7 million or 6.6 percent above forecast.

Individual income tax collections were $281.9 million in the report. Collections decreased by $20.8 million, or 6.9 percent compared to last year reflecting a rate reduction in withholding and the impact of one less payday on withholding collections. Compared to the forecast, collections are $2.6 million or 0.9 percent, above forecast.

Individual income tax refunds were at $132.4 million for February, $24.1 million below last year and $41.9 million under forecast.

The report showed corporate income tax collections were $26.9 million, a decrease of $9.1 million from a year ago, and $1.7 million lower than forecast.

Sales and use tax collections total $275.5 million, $19.8 million, or 6.7 percent, lower than last year and $26.6 million, or 8.8 percent, under forecast.

In smaller revenue sources, the report showed tobacco revenue was $13.6 million. Collections decreased by $1.9 million from year earlier levels and are less than forecast by $1.0 million. Monthly changes in tobacco tax collections can be attributed to uneven patterns of stamp sales to wholesale purchasers.

Regarding year-to-date revenue compared to previous year, the net available revenue was $53.7 million or 1.1 percent below year ago levels. The net available revenue is above forecast by $131.7 million or 2.8 percent.

Act 107 of the Secondary Extraordinary Session of 2003 increased the state sales and use tax rate from 5.125% to 6.0%, effective March 1, 2004. Effective July 1, 2004 a new sales tax on selected services went into effect in addition to an increase in vending machine decal fees. Act 94 increased the minimum corporate franchise tax and tax rate, effective for calendar years beginning January 1, 2004.

The additional revenues are deposited as special revenues to the Educational Adequacy Fund to be used to fulfill the financial obligations of the state to provide an adequate educational system. In January 2025, $63.3 million was collected and deposited to the fund. After deductions, the net amount is $61.5 million. The monthly collection is equivalent to a 0.6 percent increase from prior year collections.

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