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]

Tax Reform Task Force Keeps Income Tax Proposals Rolling, Identifies Property Tax Proposals, and Mulls Incentives Testimony

The Arkansas Tax Reform and Relief Legislative Task Force met yet again May 23-34, as efforts intensify to push toward substantive recommendations. There were three parts to the meeting: (1) voting on income tax proposals for further consideration, (2) property tax testimony and initial nomination of proposals for study, and (3) economic development incentives testimony from the Arkansas Economic Development Commission. The Task Force Co-Chairs also explained their plans for narrowing the issues under consideration and for working on legislation after the Task Force's Final Report is concluded and ahead of the 2019 Legislative Session. [More]

Arkansas Tax Reform Task Force Announces List of Sales Tax Exemptions to Study for Elimination (After Hearing from Policy Experts)

With the fiscal and special sessions concluded, the Tax Reform and Relief Legislative Task Force convened yesterday and today. Yesterday's program consisted of testimony on sales tax policy from the Tax Foundation, the Institute for Tax and Economic Policy, the Arkansas Bureau of Legislative Research (BLR), and the Department of Finance and Administration (DFA). The highlight of today's proceedings was an initial list of specific sales tax exemptions and other policies for further study. Potentially affected stakeholders should take note and consider how to respond. [More]

Arkansas Tax Reform Task Force Terminates PFM Group Consultants (After Hearing About Income Tax)

The Tax Reform Task Force heard from its tax consultant PFM Group about individual and corporate income tax policy during its meeting today (January 8, 2018), and in a surprise move it voted to terminate PFM's contract following the presentations. With PFM no longer involved, taxpayers should be especially careful as the Task Force heads toward consideration of substantive policy proposals. [More]