LLITTLE ROCK — The Arkansas Legislation Special Session continued into day two voting on legislation involving tax credits for a reduction in income tax rates and property taxes.
For the past decade, legislators have continued to decrease the annual income tax rates.
If this new bill is passed, it could mean you will see a little more money back in your pocket in each paycheck and the amount is based on what you make each year.
“Anyone making $25,000 a year is going to benefit in this tax cut,” said Sen. Jonathan Dismang (R-18). “It is going to reduce the overall rate to 3.9% for individuals.”
Legislators for the bill say this is an effort to help with the strain of inflation.
For an annual income of $25,000, this will reduce the amount taken out by $125. For $40,000, that comes out to a $200 difference and for $60,000, it would be a difference of $300.
On top of putting money back in Arkansans’ pockets, Dismang said they want Arkansas to stay competitive economically by reducing the corporate income tax to 4.3%
“We have a great inbound migration that is occurring in Arkansas and we need to keep that momentum up,” said Dismang. “That is important for a number of different reasons but mainly a healthy economy and making sure we have jobs here for people born and raised here in Arkansas.”
Other Arkansas Senators and Representatives are in support of the bills and said the cuts have proven to benefit Arkansans.
“Tax cuts that we have enacted since dating back to 2015 are working,” said Rep. David Ray (R-District 69). “Our economy is growing, unemployment is low and the revenues that come into this state remain strong and robust.”
There was pushback by Senator Greg Leding (D-District 30) who this would be $309 million that the state would have to supplement.
“There are more meaningful things we can do to benefit the lives of everyday Arkansans and make it just a little bit easier than cutting taxes for our state’s top earners,” said Leding. “To be clear, Arkansans at the lower level will not benefit much if at all from these cuts.”
Representative Denise Garner (D-District 20) echoed Leding’s concerns and said the money lost could fund helpful programs for low-income families who rely on them.
“They disproportionately benefit the wealthiest among us and undermine our ability to invest in the programs and services that benefit all Arkansans. Those making over $450,000 a year are benefitting twice as much as someone in the middle 20% and almost eight times more than the bottom 20.”
Ultimately, the bill was overwhelmingly passed in the Senate, 28 to 5, and in the House, 86 to 10. Both income tax credit bills were seen again by the Tax and Revenue Committee and passed.
The bills will have a final vote tomorrow morning and if passed they will go to the governor’s desk to be signed into law.
During the session, legislation that would increase Arkansas’s homestead tax credit is headed to a house committee after passing out of the Senate Monday morning.
If passed in the House, the legislation would increase Arkansas’s homestead tax credit from 425 to 500 dollars for the 660,000 eligible households.
Senator Steve Crowell said that if passed, lawmakers would consider an additional increase of $50 to $75 during the 2025 general session.
