State tax collections outpace forecast through January

Arkansas collected $160.3 million more in general revenue than anticipated through the first seven months of fiscal year 2026, bolstered by strong sales tax collections and one-time windfalls, including taxes on a massive Powerball jackpot.

Net available general revenues totaled $4.1 billion through January, running 4.1% above forecast and 2.8% higher than the same period last year, according to a report released Monday by the state Department of Finance and Administration.

January alone brought in $672.4 million, exceeding projections by $57.4 million or 9.3%.

The surge includes approximately $73 million in one-time revenue. About $41 million shifted from fiscal 2025 into the current year due to extended tax filing deadlines for Arkansans affected by severe weather. Another $32 million came from income tax withheld on December’s Powerball jackpot winnings.

Individual income tax collections reached $2.08 billion year-to-date, running 7.3% above forecast. January’s individual income tax haul of $384.3 million came in 15.5% higher than expected, primarily due to the lottery withholding.

Sales and use tax collections totaled $2.14 billion through January, up 3.6% from last year and 2.1% above forecast. January sales tax revenue of $317.1 million exceeded projections by 3.2%.

Corporate income tax presented the only significant shortfall. Collections of $241.9 million fell 7.1% below forecast and dropped 17.3% compared to last year’s pace.

The state’s Educational Adequacy Fund, which supports K-12 education funding, collected $65.2 million in January after deductions, a 5.9% increase from the prior year.

Gross general revenues hit $4.78 billion year-to-date, running 3.6% above forecast.

The official revenue forecast was revised Jan. 30 and will be used for comparison beginning with next month’s report.