Arkansas tax revenue beats forecast by $153.7 million

Arkansas tax revenue exceeded the state budget estimate by $153.7 million in the first four months of the current fiscal year. The Department of Finance and Administration reported that total collections for July through October 2026 reached $2.855 billion. This figure represents a 5.7% increase over the forecasted amount for the same period.

The report, released on Tuesday, Nov. 3, details how sales tax and income tax shifts contributed to the surplus. Sales tax revenue totaled $1.309 billion, a 7.9% rise compared to the same period in 2025. This amount came in 3.9% above the budget forecast. Individual income tax revenue reached $1.147 billion, up 2.3% from the previous year and 2.2% higher than the budget estimate.

Corporate income tax showed the largest dollar increase over the prior year. Collections in the first four months hit $196.6 million, which is $66.5 million more than the previous year. The corporate total also exceeded the budget estimate by $64.5 million. DFA Secretary Jim Hudson noted that October revenue alone was more than $63 million higher than the previous October. Hudson said sales tax was the primary driver, citing double-digit growth in manufacturing, construction, and food and accommodation services.

October specific figures show continued strength across sectors. Total tax revenue for the month was $692.5 million, up 10% from October 2025. October income tax payments totaled $291 million, a 9.1% year-over-year increase. The DFA explained that this rise was partly due to a disaster relief extension in the prior year, which moved some October 2025 payments into November and December. October sales tax revenue was $329.6 million, and corporate income tax was $37.5 million.

The state ended the fiscal year that closed in June 2026 with a $655 million surplus. This marks the fifth largest surplus in state history. The surplus is up 78% from the $367.9 million surplus recorded in the previous fiscal year. Total revenue for that full year was $8.686 billion, a 3.9% increase over the prior year. The DFA is scheduled to update its revenue forecast on Nov. 6.