Arkansas Taxable Sales (ATS) declined 2.1% in the third quarter following increases of 0.4% and 1.8% in the first two quarters of the year. Gasoline prices were up slightly in the third quarter, averaging $2.166 compared to $2.110 in the second quarter. As a result, spending on gasoline was up 2.1% and a broader measure of retail spending, Arkansas Taxable Sales Including Gasoline (ATSIG) declined by only 1.9%. Compared to a year earlier, both ATS and ATSIG were up slightly, 0.3% and 0.7%, respectively.
Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute.
Sources: Arkansas Department of Finance and Administration, Oil Price Information Service, Arkansas Economic Development Institute.
Revenue reports from the department of Finance and Administration attributed some of the decline in third quarter sales tax collection to reduced spending on automobiles, along with general weakness in some categories of taxable business spending. One factor mentioned in the October revenue report was relatively low tax collections from the utilities portion of the sales tax, which was held lower by cooler weather during the summer billing months. Although taxable sales growth has been slower than anticipated throughout the current economic expansion, recent weakness is at least partly attributable to temporary factors. Fourth quarter growth will be dependent on the robustness of the holiday shopping season, which is expected to be relatively strong. Our forecast models suggest year-over-year growth of close to 3%.
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Arkansas Taxable Sales (ATS) is calculated by the Arkansas Economic Development Institute to serve as a timely proxy for Arkansas retail sales. The series is derived from sales and use tax data, adjusting for the relative timing of tax collections and underlying sales, changes in tax laws, and seasonal patterns in the data. Arkansas Taxable Sales Including Gasoline (ATSIG) incorporates data on the state motor fuel tax and gasoline prices from the Oil Price Information Service. A spreadsheet of the monthly and quarterly data is available here: Arkansas Taxable Sales 2017:Q3 (Excel file).
