MAY 2026 STATE REVENUE REPORT
STATE REVENUE APPROACHES HALF BILLION DOLLAR SURPLUS
On May 20, 2026, the Arkansas Department of Finance and Administration (DFA) presented a revised forecast for the 2026 fiscal year which ends June 30. The forecast projected a year-end surplus of over one half billion dollars, $585.8 million. Today DFA reported that the State closed out the month of May with revenue that exceeded month’s forecast by $10.1 million or 0.2%, adding to the year’s surplus
DFA reported May revenue above forecast in all major collection categories. Total collections were $52.1 million or 11.9% greater than last year. In addition, income tax refunds decreased from last year which added to the revenue total.
Individual Income Tax collections increased $22.2 million or 9.6 % compared to last year. This was higher than forecast by $3 million or 1.2%. DFA reported that payroll withholding collections rose by $16.4 million or 7.8% compared to last May citing the fact that there was an extra Thursday payday this May. They also stated that year-end payments with returns and extensions rose by $4.4 million.
DFA reported that refunds were a positive to the total revenue in May, coming in at $36.4 million or $7.1 million less than last May. A decrease was evidently expected by DFA since refunds were $1.1 million greater than they had forecast. DFA reported on total year-to-date refunds as the big season is ending. Through the end of May 829,293 refunds were issued with an average refund of $467.47. This time last year 872,326 refunds were paid with an average refund of $530.53. The total decrease in refunds was $77.6 million with that positive impact on the fiscal year.
May Sales and Use Tax Collections were $13.5 million or 4.5% more than last year. This was above the monthly forecast by $6.6 Million or 2.1%. DFA reported that most major collections sectors reported growth in May. They stated that Retail Trade was up $2.0 million, and Accommodations (hotel)/Food services was up $1.8 million. DFA reported that sectors with “notable exceptions” to growth were Motor Vehicles down 3.0% and Information (Cable, satellite, telecom and media services) down 10.5%.
Corporate Income Tax collections in May totaled $19.9 million, an increase of $5.9 million from last year, and $0.9 million above forecast.
With one month left in the fiscal year the state appears on track to bank another substantial surplus. This can be attributed to continued conservative revenue forecasting and spending. It was also dependent on a stable growing economy. Optimistically a good economy will persist, and revenue forecasts will continue to cover expenditures next fiscal year.
The May 2026 revenue report may be viewed here.