Tax Reform Task Force Sees Draft Bills, Scrutinizes Credit Programs, and Weighs Tax Triggers and Revenue Projections

The Arkansas Tax Reform and Relief Legislative Task Force convened again on September 26 and 27 to hear additional testimony and refine its proposals. It was an eventful day-and-a-half: Draft bills for some Task Force proposals were introduced. The Task Force scrutinized tax credit programs with an eye toward raising revenue. And Task Force members debated how to structure long-term implementation of the Task Force's planned cuts and reforms. [More]

Acting Revenue Commissioner Gehring, Regulation Revisions, and Other News from Tax Advisory Council Meeting

The Arkansas Tax Advisory Council (TAC), an advisory group comprised of DFA leadership and tax professionals, convened for its quarterly meeting on August 14. Leadership from DFA provided an update that Assistant Commissioner Paul Gehring is acting as Commissioner of Revenue while Commissioner Walter Anger is out of the office recovering from a medical situation. In other news, the TAC also heard an update on planned revisions to DFA rules. Proposed major updates to the general sales and use tax rules are expected in the next few months, likely sometime in September or October. The TAC also discussed Wayfair and Arkansas's response. [More]

Dynamic Revenue Modeling Testimony Raises More Questions Than It Answers

The Arkansas Tax Reform and Relief Legislative Task Force met today (August 6) to hear the results of its contracted dynamic revenue modeling. The results were not groundbreaking and generally showed that the state could expect that the net costs of its proposed tax cuts and reforms should be somewhat less than the static revenue impacts projected by the Department of Finance and Administration ("DFA"), perhaps something on the order of 5% depending on the specific proposals and modeling assumptions. The business community should be concerned that the dynamic scoring will skew the Task Force's recommendations more toward income tax rate cuts rather than including the apportionment, net operating losses (NOLs), and inventory tax reforms that are vital for encouraging Arkansas investment from multistate businesses. [More]

Mixed Messages on Arkansas Implementation of Wayfair for Remote Sellers

While there have been no fundamental changes since our prior post on the state's options for taking advantage of Wayfair's termination of the physical presence nexus rule, evolving discussions and inconsistent guidance warrant an update: State leaders are still evaluating their options and appear to be leaning toward legislation in the 2019 legislative session. Informal DFA interim guidance indicating that remote sellers should collect does not appear to be supported by any actual binding law. [More]