Arkansas Tax Reform Update: SB576 Amended to Add Rate Cut and Drop Throwback Repeal

The major Arkansas tax reform package, Senate Bill 576, passed out of committee as amended and is heading to the floor of the Senate this week. We covered the package in detail previously. The changes are as follows: Adding a corporate income tax rate cut from 6.5% to 5.9%; Having the NOL carryforward extension be from 5 to 10 years (instead of 5 to 20); Eliminating the repeal of the throwback rule (i.e., the throwback rule would continue to be retained); and Providing safe harbors for marketplace facilitators when relying on information from marketplace sellers. [More]

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]