APRIL 2025 STATE REVENUE REPORT
STATE REPORTS APRIL REVENUE BELOW FORECAST IN ALL MAJOR CATEGORIES
The Arkansas Department of Finance and Administration (DFA) reported today that April Net General Revenue was below forecast by $79.5 million or 10.9%. All major revenue categories were below forecast. Individual Income Tax was $57.4 million, or 10.4%, below forecast, Corporate Income Tax was $32.8 million, or 22.7%, below forecast, and Sales and Use Tax was $4.5 million, or 1.5%, below forecast.
DFA Secretary Jim Hudson issued a statement with the Revenue Report stating that “April net revenues were below forecast primarily due to an extension of income tax filing and payment deadlines pursuant to executive orders following severe storms”. Secretary Hudson said that “Looking at the overall results year-to-date, the state is still $52 million ahead of forecast (on top of the projected surplus of $279 million)”. He stated that DFA believes that year-end results will “provide ample margin to mitigate any revenue that may have shifted into the 2026 fiscal year”.
April Individual Income Tax was reported to be $112.5 million, or 18.5%, less than last year. This decrease was attributed to rate reductions impacting employee tax withholding. In addition, the extension of filing and payment dates until July 31 and having one less payday in the month were also cited as causes of the shortfall. If a large amount of the $112.5 million is the result of the extended filing and payment deadlines, increased Individual Income Tax payments should occur in July or August for next fiscal year.
Corporate Income Tax collections were $61.7 million less than less year. The report attributed most of the shortfall to extension payments which may be recouped in July or August payments.
Sales and Use Tax collections returned to positive territory and were $2.3 million or 0.7% higher than last April. Even though DFA characterized this as a rebound as stated previously collections were $4.5 million or 1.5% less than forecast. Sales and Use Tax continues to not keep up with price inflation which should be a matter of economic concern. Year-to-date Sales and Use Tax has only grown 0.7% , well below the inflation rate.
DFA will issue a new revenue forecast on May 21, 2025. The new forecast for Fiscal Year 2026 should reflect additional income from Individual and Corporate payments that would normally have been received in this fiscal year. It should also reflect the economic outlook for Sales and Use Tax next year and demonstrate whether collections should exceed built-in inflationary growth. The forecast will also reflect whether DFA predicts that collections can continue to fund the state budget and accumulate a surplus next fiscal year.
The April 2025 revenue report may be viewed and downloaded here.