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]

Governor's Slimmed Down "5.9% Plan" for $97 Million of Individual Rate Cuts Introduced

Governor Hutchinson announced his individual tax cuts plan today. It is a scaled down version of the 2%-4%-5.9% plan that the Tax Reform and Relief Legislative Task Force had recommended. Essentially it retains Arkansas's unique three-bracket-schedules individual tax system and reforms the tax brackets only for the high-income bracket schedule. There are also some minor upward adjustments to the low- and middle-income bracket schedules. The 5.9% plan comes with a much-reduced fiscal impact: a $97 million reduction in revenue instead of a $192 million reduction. That could mean that the state can enact the business tax reforms needed for competitiveness sooner rather than later. [More]

They Pulled It Off: Tax Reform Task Force Picks Preferred Individual Tax Cuts Plan, Approves Draft Legislation Package, and Adjourns

The Arkansas Tax Reform and Relief Legislative Task Force has concluded its 20 months of proceedings by approving draft legislation for a roughly $400 million tax reform and relief package that should guide the state's tax policy for the next decade. If implemented, it will provide Arkansas with a fairer and more competitive tax system while maintaining the state's fiscal stability. The next step will be to see the proposals through and further refine them as part of the regular legislative process in 2019. [More]