JULY 2026 STATE REVENUE REPORT
ARKANSAS BEGINS FISCAL YEAR WITH $26.3 MILLION SURPLUS
The Arkansas Department of Finance and Administration (DFA) reported today that July, the first month of the new fiscal year, ended with Net General Revenue above forecast by $26.3 million. This was 4.6 percent greater than forecast, creating a new surplus. Revenue exceeded forecast in the three major state revenue categories of Sales Tax, Individual Income Tax and Corporate Income Tax.
Sales and Use Tax was the biggest contributor to the surplus, exceeding forecast by $12.9 million or 4.1 percent. DFA reported that, “Strong growth was recorded in most major reporting sectors”. Utilities rose 19.9 percent which DFA attributed to higher temperatures in late spring. Wholesale Trade was up $4.6 million, and Retail Trade was up $7 million over last July according to DFA. They reported that Accommodation and Food Services (hotel and restaurant) had modest growth of only 0.8 percent which was certainly below price inflation in those categories. DFA did not indicate how much the sectors experienced increased collections because of recent accelerated price inflation which economists recognize automatically increases Sales and Use Tax.
Individual Income Tax Collections were $8.8 million or 3.4 percent less than last July. DFA noted that the reason for this is that income was shifted from earlier months into July of 2025. This was because of extended payments allowed by weather related reporting and payment extensions. Individual Income Tax was above forecast by $1.8 million or 0.7 percent.
Corporate Income Tax collections totaled $27.6 million which was $3.4 million greater than last July and exceeded forecast by $3.3 million.
DFA pointed out that in July there was an anticipated transfer of $9.8 million from General Revenue to the Arkansas Major Historic Rehabilitation Trust Fund. This was to reimburse for payments made to recipients of the program. This reimbursement was $9.8 million which was $4.4 million less than the transfer made last July. This positively impacted the Net Available General Revenue comparison with last July.
With prudent budget management and forecasting the state has begun Fiscal Year 2027 on a positive note. Solid employment seems to have bolstered the Individual Income Tax to overcome the comparison to last July which benefited from a tax payment timing shift. The Sales and Use Tax category is apparently outpacing price inflation overall even though hotel and restaurant sales lag inflation. Overall State finances are off to a good start with money in the bank for the new fiscal year.
The June 2026 revenue report may be viewed here.