Arkansas Tax Overhaul Continues

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The 16 members of a legislative task force sat down for a lesson in the state’s tax system during its second meeting Wednesday.

The Arkansas Tax Reform and Relief Task Force, part of the governor’s new law that established a $50 million income tax cut for low-income taxpayers, should modernize and simplify the tax code, make Arkansas tax laws competitive with other states to attract business, create jobs, ensure fairness to all individuals and entities impacted by tax laws, and ultimately recommend new legislation for the 2019 legislative session.

The legislation requires the task force to submit a preliminary report Dec. 1. The final report is due Sept. 1, 2018 ahead of the session.

“All of this is the tax code in Arkansas,” Joi Leonard, the legal research and drafting administrator with the Bureau of Legislative Research (BLR), told the task force members as she pointed to a stack of books. “There are more taxes in Arkansas than most people realize.”

Leonard broke down the state’s tax code and how the constitution impacts it as lawmakers try to overhaul the system.

Richard Wilson, the assistant director of research services with BLR, reviewed the state’s previous tax reform from 1997 to the present.

“If we’re going to ask the general public to step up, we have to ask the agencies to do so,” said Sen. Eddie Joe Williams, R-Cabot. 

“I have no problems looking into it,” responded Rep. Lane Jean, R-Magnolia, one of the co-chairs of the task force.

Among the piles of homework ahead, lawmakers plan to analyze the effectiveness of the state’s many tax exemptions but haven’t figured out exactly how to do it.

“It would be helpful for us as a task force to be able to establish whatever the filter may be then run everything through that filter and let the chips fall where they may,” said Sen. Missy Irvin, R-Mountain View.

Others outside of the task force have weighed in on what it should do over the next year and a half.

“That mother that’s working in a convenience store as an assistant manager, is that tax break just to say you gave her one or is she going to see some real relief,” said Michael John Gray, the chairman of the Democratic Party of Arkansas.

“We’d love to see a restructuring of the tax code that keeps low-income kids and families in mind,” said Ellie Wheeler, a senior policy analyst for Arkansas Advocates.

“Why do Arkansans pay so much in taxes? It’s because Arkansas state government requires too much revenue to function- it spends too much,” wrote Lt. Governor Tim Griffin in a letter to the task force. 

The 16 task force members ended the day’s lesson by unanimously approving a request for proposal (RFP) process to hire a consultant.

“We’re going to need some professional guidance and help with this,” said Rep. Jean.

Jill Thayer, the BLR’s counsel to the director and author of the RFP, said she will open the application period Monday. Ahead of the July 10 deadline for submissions, candidates can learn how to apply on the Office of State Procurement website.

After Thayer summarizes the applications, the 16 members will review the candidates and make a decision in August.

The task force’s next regular meeting is July 11.
 

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