Week 3 Report: Tax Legislation from the 91st General Assembly

Week 3 Report: Tax Legislation from the 91st General Assembly

Week 3 in the Arkansas legislature focused on tax-related legislation, ending with the passage of the Governor's tax cut for lower income families through both houses (HB1159 and SB115). However, Rep. Sabin's bill creating a state version of the federal Earned Income Credit failed to pass in the House. Other notable tax-related bills include a proposal to reduce tax rates if enough income tax is collected in a fiscal year (HB1227), a sales and use tax exemption for parts and repair of agricultural equipment (HB1263) and SB112, which creates a new deduction for education expenses for dependent children. - Erika Gee

AR - HB1157 CONCERNING HOMESTEAD PROPERTY TAX CREDIT ELIGIBILITY; AND TO DECLARE AN EMERGENCY.

AR - HB1159 TO CREATE THE TAX REFORM AND RELIEF ACT OF 2017; AND TO DECLARE AN EMERGENCY.

  • Summary: Identical to SB115.
  • Last Action: Returned by the Committee, with the recommendation that it Do Pass (January 25, 2017)
  • Primary Sponsor: Representative Mathew W. Pitsch (R)

AR - HB1161 TO CREATE THE WORKING FAMILIES OPPORTUNITY ACT.

  • Summary: The "Working Families Opportunity Credit", which is allowed against the income tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., in an amount equal to five percent (5%) of the credit allowed to the taxpayer under 26 U.S.C. § 32, states that if the amount of the income tax credit allowed under this section exceeds the taxpayer's income tax liability, the excess shall be refunded to the taxpayer.
  • Last Action: CLINCHER MOTION ADOPTED (January 24, 2017)
  • Primary Sponsor: Representative Warwick Sabin (D)
  • Amendments:

AR - HB1162 TO AMEND ARKANSAS TAX LAW CONCERNING INCOME TAX, SALES AND USE TAXES, AND THE SOFT DRINK TAX; AND TO SUPPLEMENT THE ARKANSAS MEDICAID PROGRAM TRUST FUND TO OFFSET DECREASED DEPOSITS FROM TAX REVENUES.

AR - HB1227 TO REDUCE INCOME TAX RATES IN CERTAIN CIRCUMSTANCES; AND TO REDUCE INCOME TAX RATES BASED ON THE GROWTH OF INCOME TAX COLLECTIONS.

  • Summary: Each tax rate shall be reduced by one-eighth (1/8) of one (1) percentage point if the total income tax revenues collected under this chapter for a fiscal year exceed by at least 3%
  • Last Action: Read the first time, rules suspended, read the second time and referred to the Committee on REVENUE & TAXATION- HOUSE (January 23, 2017)
  • Primary Sponsor: Representative Joe Farrer (R)

AR - HB1253 TO REPEAL THE REQUIREMENT THAT CERTAIN RETAILERS PREPAY SALES TAXES.

  • Summary: Repeals § 26-52-512 requiring certain retailers to prepay sales tax.
  • Last Action: Read the first time, rules suspended, read the second time and referred to the Committee on REVENUE & TAXATION- HOUSE (January 23, 2017)
  • Primary Sponsor: Representative Jeff Wardlaw (R)

AR - HB1263 TO CREATE A SALES AND USE TAX EXEMPTION FOR PARTS FOR AND REPAIR OF AGRICULTURAL EQUIPMENT AND MACHINERY.

  • Summary: Creates an exemption for a sales and use tax for parts for and services for the repair of agricultural equipment and machinery (including aviation).
  • Last Action: Read the first time, rules suspended, read the second time and referred to the Committee on REVENUE & TAXATION- HOUSE (January 24, 2017)
  • Primary Sponsor: Representative Joe Jett (R)

AR - SB9 TO ENCOURAGE CHARITABLE GIVING AND ELIMINATE PERVERSE AND ABSURD TAXES AND DISINCENTIVES ON CHARITABLE GIVING; AND TO EXEMPT CERTAIN WITHDRAWALS OF STOCK FROM THE SALES AND USE TAX.

  • Last Action: Read first time, rules suspended, read second time, referred to Senate Committee on Revenue and Taxation (January 9, 2017)
  • Primary Sponsor: Senator Alan Clark (R)

AR - SB112 TO ALLOW AN INCOME TAX DEDUCTION FOR QUALIFYING EDUCATION EXPENSES.

  • Summary: Allows an income tax deduction for education expenses,  including amounts spent to purchase textbooks, school uniforms, school supplies, and tuition for dependent children.  A deduction for fifty percent (50%) of the amount spent up to five thousand dollars per child is allowed. Includes homeschooling and public and non-public elementary or secondary schools.
  • Last Action: Read first time, rules suspended, read second time, referred to Senate Committee on Revenue and Taxation (January 11, 2017)
  • Primary Sponsor: Senator Jane English (R)

AR - SB115 TO CREATE THE TAX REFORM AND RELIEF ACT OF 2017; AND TO DECLARE AN EMERGENCY.

  • Summary: This bill concerns §26-51-201(a)(7) and (8) which seeks to amend the income tax rates applicable to individuals, trust, and estates and is set to become effective January 1, 2019. Furthermore, this bill would create a Legislative Task Force that will examine and identify area of potential reform within the tax laws and to recommend legislation during the 2019 session.
  • Last Action: Returned by the Committee Do Pass (January 26, 2017)
  • Primary Sponsor: Senator Jim Hendren (R)
  • Amendments:

AR - SB119 TO CREATE THE WORKING FAMILIES OPPORTUNITY ACT.

  • Summary: Identical to HB1161
  • Last Action: Read first time, rules suspended, read second time, referred to Senate Committee on Revenue and Taxation (January 12, 2017)
  • Primary Sponsor: Senator Jake Files (R)
  • Amendments:

AR - SB120 TO AMEND ARKANSAS TAX LAW CONCERNING INCOME TAX, SALES AND USE TAXES, AND THE SOFT DRINK TAX; AND TO SUPPLEMENT THE ARKANSAS MEDICAID PROGRAM TRUST FUND TO OFFSET DECREASED DEPOSITS FROM TAX REVENUES.

  • Summary: See HB1162--Tax reform bill--Amends Ark. Code Ann § 26-52-103(12)(B) to exclude candy or soft drinks as being “food” or “food ingredients.” Also allows for taxing the entire value of a new manufactured or modular home instead of just 62% of it.  Exempts retirement benefits received by military form income tax
  • Last Action: Re-referred to Senate Committee on Revenue and Taxation (January 26, 2017)
  • Primary Sponsor: Senator Jane English (R)
  • Amendments:

AR - SB166 TO CREATE A SALES TAX EXEMPTION FOR THE DISABLED AMERICAN VETERANS ORGANIZATION.

  • Summary: Sales tax exemptions for gross receipts or gross proceeds derived from sales of tangible personal property or services to the Disabled American Veterans Organization.
  • Last Action: Read first time, rules suspended, read second time, referred to Senate Committee on Revenue and Taxation (January 23, 2017)
  • Primary Sponsor: Senator Jason Rapert (R)