The bill amends the Arkansas Income Tax Withholding Act of 1965 by reducing the threshold for mandatory electronic filing of annual withholding statements from 250 employees to 125 employees. This change aims to streamline the filing process for employers with fewer employees, making it easier for them to comply with tax regulations. Additionally, the bill eliminates the previous options for filing on magnetic media or in other machine-readable forms, mandating that employers file electronically. However, it introduces a provision allowing the Secretary of the Department of Finance and Administration to waive the electronic filing requirement if it poses an undue hardship on the employer.

The effective date for these changes is set for tax years beginning on or after January 1, 2024. This amendment is intended to simplify the filing process and reduce the administrative burden on smaller employers while ensuring compliance with state tax laws.

Statutes affected:
SB 434: 26-51-909(b)
Act 644: 26-51-909(b)