LITTLE ROCK, Ark. (KNWA/KFTA) — Governor Asa Hutchinson (R-AR) announced on Tuesday that a special session of the Arkansas General Assembly will soon consider a personal income tax reduction plan.
“Everyone knows I’ve been fully supportive of lowering the individual income tax rate in Arkansas,” Hutchinson said during his weekly COVID-19 press conference on Tuesday. “I’ve worked very closely with the tax-writing committee chairman, as well as leadership of the House and Senate trying to reach a consensus on what should be in a tax reduction plan.”
The Republican governor said their are three principal parts that are being considered as part of the plan: 1) a low-income tax break that would increase the individual tax credit from $29 to $60 for those making less than $22,900. 2) Combining the low & middle-income tax tables, 3) reducing the top rate from 5.9 percent to 5.5 percent next year & 5.3 percent on January 1, 2023.
Hutchinson said there’s also been discussion about reduction of the corporate tax rate.
“Some of that would have to be triggered based upon meeting certain financial revenue responsibilities of the state to make sure the RSA is properly funded,” Hutchinson said.
By income range, the biggest portion of the tax cut — 43.4 percent — would go to those making $82,001 and up, according to charts shown by Hutchinson on Tuesday.
The remaining 56.6 percent of the tax cut would go to those making less than $82,000.
“There’s a broad agreement that these ought to be elements of the plan,” Hutchinson said, noting that he wanted to get the facts out to the public so that they can participate in the conversation.
The Special Session tentatively scheduled for Monday, October 25, will be delayed.
“I’ll work the legislative leadership in finalizing this outline into, hopefully, a bill form, that we can generate the support that is needed to pass in the session,” Hutchinson said.