Department of Finance and Administration
Legislative Impact Statement
Bill: HB1116
Bill Subtitle: TO CREATE AN INCOME TAX CREDIT FOR TAXPAYERS SIXTY-FIVE (65) AND
OLDER IN AN AMOUNT EQUAL TO THE TAXPAYER'S PROPERTY TAX PAYMENT ON A
HOMESTEAD.
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Basic Change :
Sponsors: Reps. Cavenaugh and Vaught
HB1116 creates a refundable individual income tax credit equal to the real property tax paid in the prior
calendar year on the individual's homestead. An individual qualifies for the credit if they are at least
age 65 in the calendar year they apply for the credit. The taxpayer may not claim past due property
taxes or penalties paid in the prior calendar year as part of the income tax credit. The tax credit is
available for tax years beginning on or after January 1, 2023.
Revenue Impact :
FY2024 - $202,686,000 General Revenue Reduction
[ Revenue impact is based on Arkansas Assessment Coordination Division Report of Tax Assessed on
the Homestead of Arkansans Sixty-Five (65) and Over as of January 2022 and projected by U.S.
Census Bureau Estimated Population Percentage Change. ]
Taxpayer Impact :
A taxpayer aged 65 years or over who paid property tax on a homestead would be eligible for a
refundable income tax credit equal to the amount paid.
Resources Required :
Computer programs, tax forms and instructions will require update. Department of Finance and
Administration (DFA) personnel will need to be trained to administer the tax credit. The Tax Credits and
Special Refunds Section of the DFA will require one Auditor and three Fiscal Support Analysts for an
additional personnel cost of $169,600 annually. Estimated programming costs for the Arkansas
Integrated Revenue System (AIRS) is $360,000 and yearly maintenance of $45,000.
Time Required :
AIRS personnel would need approximately nine months to implement the form changes and
verification. Time would also be necessary for county personnel to provide information to DFA for
verification of payment of real estate taxes.
Procedural Changes :
Individual Income Tax forms and instructions will need to be updated. County employees will need to
be educated as well as the tax community.
Other Comments :
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1/24/2023 9:01 AM 1
 Department of Finance and Administration
Legislative Impact Statement
Bill: HB1116
Bill Subtitle: TO CREATE AN INCOME TAX CREDIT FOR TAXPAYERS SIXTY-FIVE (65) AND
OLDER IN AN AMOUNT EQUAL TO THE TAXPAYER'S PROPERTY TAX PAYMENT ON A
HOMESTEAD.
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None.
Legal Analysis :
None.
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