JULY 2025 STATE REVENUE REPORT

STATE FISCAL YEAR COLLECTIONS BEGIN $29.2 MILLION ABOVE FORECAST

The Arkansas Department of Finance and Administration (DFA) reported today that for the first month of the new state fiscal year, July Net General Revenue was $29.2 million, or 5.5%, above forecast. In the most recent forecast revision in May, DFA had projected that July revenue would be essentially flat. Total collections exceeded last July by $29.8 million, or 5.6%.

DFA attributed the strong July results “primarily to estimated tax payments” resulting from extended Income Tax filing deadlines last fiscal year due to severe weather relief. The later filing dates shifted some Income Tax payments from last fiscal year into this July. Notably, payroll withholding tax was down from last year, which DFA attributed to recent tax cuts. DFA also noted that Sales Tax collections came in above forecast, contributing to the strong July performance.

Individual Income Tax collections were up $12.4 million, or 5%, over last July and $22.8 million, or 9.6%, above forecast. July Payroll Withholding Tax payments decreased by $2.4 million from last July.

July Sales and Use Tax collections totaled $299.3 million, which was $9.2 million, or 3.2%, more than last July, and $2 million, or 0.7%, above forecast. After several months in which Sales and Use Tax growth lagged behind price inflation, this fiscal year begins with a month of growth comparable to inflation.

Corporate Income Tax collections totaled $24.2 million for July, $1.3 million more than last July and $5.8 million above forecast.

It is encouraging to begin a new fiscal year with revenue collections exceeding last July in all major categories. It is also positive to see Sales and Use Tax growth at least keeping pace with inflation. Eventually, once all Income Tax cuts have been fully phased in and the impact of extended filing deadlines has been absorbed, the monthly Revenue Report should better reflect how economic factors are influencing tax collections. For now, we are reaping the benefits of conservative forecasting and budgeting which assure that there is more than sufficient revenue to pay the State’s bills.

The July 2025 revenue report may be viewed here.