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 September 2025 issue.

Department of Finance & Administration General Revenue Report August 2025

The August revenue results from the Arkansas Department of Finance and Administration were above forecast in Corporate and Individual Income Tax, a relatively low collection month for these categories. August collections include some shifting of quarterly estimated and extension tax payments for April and June because of the executive orders issued by Governor Sanders to provide relief to Arkansans affected by recent severe weather. Sales Tax collections were above forecast and year ago levels. Income Tax refund claims were above forecast in Corporate and less than forecast in Individual.

The monthly DFA report for August shows net available general revenue was $568.7 million, $52.6 million or 10.2 percent higher than last year and $46.6 million or 8.9 percent above forecast.

Individual income tax collections were $263.1 million in the report. Collections increased by $25.2 million, or 10.6 percent compared to last year. Compared to the forecast, collections are $28.7 million or 12.2 percent higher. Individual Withholding Tax revenue increased by $6.6 million, or 3.1 percent compared to last year.

Individual income tax refunds totaled $13.8 million, $4.9 million below last year and $2.9 million less than forecast.

The report showed corporate income tax collections were $5.5 million, an increase of $1.5 million from a year ago, and $2.1 million over forecast.

Sales and use tax collections total $322.9 million, $16.0 million, or 5.2 percent greater than last year. Collections were above monthly forecast levels by $14.8 million or 4.8 percent. Collections were up in almost all major reporting sectors.

In smaller revenue sources, the report showed tobacco tax collections total $15.6 million. Collections increased by $0.2 million from year earlier levels and were more than forecast by $1.0 million. Monthly changes in tobacco tax collections can be attributed to uneven patterns of stamp sales to wholesale purchasers.

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 August 2025, $66.3 million was collected and deposited to the fund. After deductions, the net amount is $64.4 million. The monthly collection is equivalent to a 5.7 percent increase from prior year collections.

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