April's revenue report shows significant declines for Arkansas, but the state's overall fiscal outlook remains stable.
Date: May 2, 2025 | Location: Arkansas
In April 2025, Arkansas’ general revenue collections dropped by $172.8 million, or 15.5%, compared to the same month last year, totaling $940.6 million. This marked a $94.8 million, or 9.2%, shortfall from the state's forecast.
Income Tax Filing Extensions: The extension of income tax filing and payment deadlines due to severe storms led to delayed collections. The filing deadline was pushed from April 15 to July 31, contributing to the drop in revenue.
Sales Tax Increase: On a positive note, Arkansas saw a rebound in sales tax collections for April, and year-to-date sales tax performance is now closely aligned with the forecast.
Individual Income Tax: Collections fell by 18.5% from last year to $494.2 million, missing forecasts by $57.4 million. This was mainly due to tax rate reductions, fewer paydays for withholding, and the deadline extension.
Sales & Use Tax: Collections increased slightly by 0.7%, reaching $302.9 million, but fell short of expectations by $4.5 million, or 1.5%.
Corporate Income Tax: Corporate collections saw a sharp decline of 35.6% year-over-year, down by $61.7 million to $111.7 million, missing forecasts by $32.8 million, largely due to extended payment schedules.
Despite the decline in April, Arkansas is still on track for a surplus in fiscal 2025. The state's net general revenue year-to-date shows a slight decline of $224.7 million, or 3.9%, from the same period in fiscal 2024, but it is $52.2 million above forecast.
Forecasted Surplus: The finance department projects a surplus of $278.6 million for fiscal 2025 by the end of June, with further updates to the forecast expected by May 21.
Though April saw significant shortfalls, Arkansas remains ahead of the forecast for the year. The state has some leeway to accommodate delayed revenue due to the filing extensions. The final revenue update later this month will provide further clarity, but overall, the state's fiscal position is expected to remain stable.