Arkansas Tax Legislation "March Madness": Administrative Changes, an Independent Tax Appeal Tribunal, and More

With March more than halfway over, a surprising amount of tax legislation is still on the agenda for the General Assembly. In addition to the recently-filed major business tax reforms of SB 576, other significant tax bills that have been introduced include: (1) the Tax Reform Task Force administrative reforms (SB 561), an independent Tax Appeals Commission (SB 560), and a low-income tax cut paid for by taxes on cigarettes and e-cigarettes (SB 571). The state government transformation (reorganization) bill (HB 1763) also has implications for taxpayers. And we have not yet seen an Internal Revenue Code conformity bill. Interested stakeholders need to monitor the unpredictable weeks ahead. [More]

Major Arkansas Tax Reform Bill Introduced: Remote Seller Collection, Apportionment, and NOLs

A major tax bill was introduced today that, if enacted, will make the Arkansas tax system fairer and much more competitive. Senate Bill 576 (SB 576) includes: (1) sales tax collection by remote sellers and marketplace facilitators; (2) single sales factor apportionment and repeal of the throwback rule; (3) extension of the net operating loss (NOL) carryforward limit from 5 years to 20 years; and (4) substitution of a car wash water use fee for the current sales tax on car washes. These reforms are a culmination of the two-year Tax Reform and Relief Legislative Task Force process and would create a much more favorable tax climate for many Arkansas businesses --particularly manufacturers, retailers, wholesalers, and banks. Interested taxpayers need to get involved to support the bill as it enters into a hurried final weeks of the legislative session. [More]

Patching Up the Consolidated Incentives Act: HB1490 Would Make Numerous Revisions to Arkansas Incentives

While much of the Arkansas tax news is focusing on the highway bill, a significant economic development bill, HB1490, was introduced yesterday. HB1490 fixes a number of flaws in the CIA—the Consolidated Incentives Act of 2003—which governs most state-level general business incentives: Advantage Arkansas, Create Rebate, Tax Back, ArkPlus, R&D credits, etc. The changes are incremental and do not address some of the more fundamental issues with the incentives. But the numerous changes are a general improvement and should give the Arkansas Economic Development Commission more flexibility in structuring inducements to bring jobs and investment to Arkansas. [More]

Individual Tax Cuts Pass; Time for the Highway Funding Bill

With the Governor's individual income tax cuts plan now passed by the Arkansas General Assembly and to be signed into law next week, the next big-ticket tax bill is the highway funding bill. The package was announced on February 11, and legislation has now been introduced. It is projected to raise $300 million annually for state highways and also $110 million for county and municipal roads. The package will move forward with a bill containing most of the provisions, SB336, and companion resolutions for the referred sales tax increase, HJR1018 and SJR14. [More]