LITTLE ROCK, Ark. (KNWA/KFTA) — Gov. Asa Hutchinson has called members of the Arkansas State Legislature into a special session to begin at 10 a.m. on December 7 to enact reductions to state income taxes.
“The key reason for the session is the tax-reduction bill,” Hutchinson said during his weekly briefing. “I spoke with both the Speaker of the House Matthew Shepard and Senate Pro Tem Jimmy Hickey, and they confirm that we have more than a majority vote on the tax bills to have that passed. They feel confident with the support for that.”
According to a news release from the governor’s office, the tax cut bill that is proposed aims to lower the top tax rate for individuals from 5.9% to 4.9% over the next four years.
The release says this will lower the maximum rate at which an individual is taxed from 5.9% to 5.5% in tax year 2022 and down to 5.3% in tax year 2023. As long as certain parameters are met, the tax cut will also include reducing the rate down to 5.1% in tax year 2024 and then down to 4.9% in tax year 2025.
The bill will also combine the low- and middle-income tax table, and provide for a $60 non-refundable tax credit from those individuals with an income of less than $24,700, according to the release.
“This bill puts us in a competitive position with other states,” Hutchinson said. “I’ve pushed to try to get down to 5%, and it looks like we’re going to be able to get down to 4.9%.”
Other bills on the call:
State funds in various accounts throughout state government need to be transferred to Restricted Reserve Funds, the General Allotment Reserve Account, and the Quick Action Closing Fund, according to the release.
The release says this bill allows for more federal money from the American Rescue Plan to flow into Arkansas where it is needed.
Act 1104 which passed during the regular session changed laws related to insulin rebates. The release says since passage, it was determined to have unintended consequences, and the goal is to repeal the bill.
Act 1041, concerning LLC laws, was passed during the regular session. The release says that there was a drafting issue, and this amendment will rectify the issue.
Tax Appeals Commission
Act 586 of 2021 created the Independent Tax Appeals Commission. This bill aims to correct some language in the original act, according to the release.
Tax Incentive Amendment
The release says this bill amends income tax credit for waste reduction, reuse, or recycling equipment to allow for use of these credits by a qualified growth project.
General Assembly Security Personnel
This bill allows both chambers to hire and employ security personnel, according to the release.
The call for the special session can be found here.