The July General Revenue Report from the Department of Finance and Administration (DFA) showed that gross receipts collections (primarily sales and use taxes) were up sharply in July– 8.9 percent higher than the previous year and 2.7 percent above the DFA forecast. This information implies a surge in taxable sales toward the end of the second quarter of 2010.
In fact, newly calculated statistics show that Arkansas Taxable Sales rose by 4.0 percent in the second quarter (preliminary*) following a revised 2.6 percent growth rate in the first quarter of the year. The latest reading represents the third consecutive quarterly increase.
The improvement in Arkansas Taxable Sales growth in the second quarter contrasts with national retail sales data, which showed a slowdown in growth. After increasing at a 2 percent rate in the first quarter, U.S. Retail Sales rose by only 1 percent in the second quarter. As illustrated in the chart below, Arkansas Retail Sales have increased by a total of 7.6 percent over the past three quarters of growth, while U.S. Retail Sales have increased by only 6.8 percent over four quarters of growth. The turnaround in Arkansas sales growth lagged the rest of the nation, but the most recent data on Arkansas Taxable Sales suggests that Arkansas is rebounding more quickly.
The Arkansas Taxable Sales series is calculated by IEA to serve as a timely measure of Arkansas retail sales. The series is derived from sales and use tax data from DFA, adjusting for the relative timing of tax collections and underlying sales, changes in tax laws, and seasonal patterns in the data.
A spreadsheet of the data is available here: Arkansas Taxable Sales data (Excel file)
* Data are preliminary until the release of the DFA report, Arkansas Fiscal Notes for July 2010, and will be updated when information becomes available.