Stricken language would be deleted from and underlined language would be added to present law.
1 State of Arkansas
2 94th General Assembly A Bill
3 Regular Session, 2023 HOUSE BILL 1669
4
5 By: Representatives Pilkington, J. Richardson
6 By: Senator C. Penzo
7
8 For An Act To Be Entitled
9 AN ACT TO ELIMINATE BARRIERS TO STARTING A NEW
10 BUSINESS; TO AMEND ARKANSAS INCOME TAX LAW; TO ALLOW
11 CERTAIN NEW BUSINESSES TO DEFER PAYING CERTAIN INCOME
12 TAXES; TO CREATE THE ARKANSAS ENTREPRENEUR EXTENSION
13 PROGRAM; AND FOR OTHER PURPOSES.
14
15
16 Subtitle
17 TO ELIMINATE BARRIERS TO STARTING A NEW
18 BUSINESS; TO AMEND ARKANSAS INCOME TAX
19 LAW; TO ALLOW CERTAIN NEW BUSINESSES TO
20 DEFER PAYING CERTAIN INCOME TAXES; AND TO
21 CREATE THE ARKANSAS ENTREPRENEUR
22 EXTENSION PROGRAM.
23
24
25 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
26
27 SECTION 1. Arkansas Code Title 4, Chapter 25, Subchapter 1, is amended
28 to add an additional section to read as follows:
29 4-25-111. Waiver of licensing fee, permit fee, and registration costs
30 for certain new businesses — Definitions.
31 (a) As used in this section:
32 (1) "Eligible new business" means a domestic corporation, an
33 Arkansas limited liability company, or other business entity headquartered in
34 Arkansas that:
35 (A) Is newly formed and registered to perform an
36 occupation or business activity in this state;
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1 (B) Is owned by an individual or individuals who have not
2 owned a business entity in Arkansas during the five (5) years before the date
3 of registration under subdivision (a)(1)(A) of this section; and
4 (C) Submits a request for a waiver under subsection (b) of
5 this section or subsection (c) of this section at the time of registration
6 with a state entity or local government;
7 (2) "Eligible new business owner" means an individual who has
8 organized an eligible new business in this state;
9 (3) "Filing fee" means a charge incurred for transacting or
10 processing documentation by a state entity or a local government to organize
11 and operate a business in this state;
12 (4) "Licensing fee" means a sum of money required by a state
13 entity or a local government for a license, certificate, registration,
14 permit, or other form of authorization required by law or rule that is
15 required for an individual to organize and operate a business in this state;
16 (5)(A) "Local government" means an office, board, commission,
17 department, council, bureau, or other agency of state government having
18 authority to license, certify, register, permit, or otherwise authorize an
19 individual to engage in a business in this state.
20 (B) "Local government" includes:
21 (i) A county;
22 (ii) A city of the first class or city of the second
23 class;
24 (iii) An incorporated town; or
25 (iv) Any other district or political subdivision or
26 any office, board, commission, or agency of these political subdivisions;
27 (6) "Permit fee" means a sum of money required by a state entity
28 or a local government to organize and operate a business in this state;
29 (7) "Registration costs" means any costs required by a state
30 entity or a local government to register a business in order for the business
31 to organize and operate in this state; and
32 (8) "State entity" means any instrumentality of state
33 government, including without limitation a board, commission, committee,
34 advisory board, office, department, institution, bureau, council,
35 administrative program, agency, or division.
36 (b) Notwithstanding any law to the contrary, the filing fees, permit
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1 fees, licensing fees, and registration costs associated with the formation of
2 an eligible new business in this state shall be waived for the first five (5)
3 years for an applicant who owns an eligible new business if the eligible new
4 business submits a waiver to the state entity or local government and the
5 state entity or local government grants the waiver for the eligible new
6 business.
7 (c) Notwithstanding any law to the contrary, a licensing entity shall
8 not require a fee to be paid for individuals who are seeking to receive a
9 license in this state for the first five (5) years if the applicant is an
10 eligible business owner and submits a waiver to the state entity or local
11 government and the state entity or local government grants the waiver for the
12 eligible new business owner.
13 (d) The fee waiver does not include fees for:
14 (1) A criminal background check;
15 (2) An examination or a test; or
16 (3) Medical or drug screenings.
17 (e) A state entity and local government may publish on the website
18 maintained by the state entity or local government:
19 (1) Notice of the fee waiver; and
20 (2) Any relevant forms that an applicant is required to
21 complete.
22 (f) A state entity may promulgate any necessary rules to implement
23 this section.
24
25 SECTION 2. Arkansas Code Title 26, Chapter 51, Subchapter 8, is
26 amended to add an additional section to read as follows:
27 26-51-818. New business income-tax deferral.
28 (a) As used in this section, an "eligible new business" means a
29 domestic corporation, an Arkansas limited liability company, or other
30 business entity headquartered in Arkansas that:
31 (1) Files for the deferral under subsection (b) of this section
32 within twelve (12) calendar months of having registered with the Secretary of
33 State; and
34 (2) Is owned by an individual or individuals who have not owned
35 a business entity in Arkansas during the five (5) years before the date of
36 registration under subdivision (a)(1) of this section.
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1 (b) An eligible new business may, upon grant of an application for an
2 extension under subsection (c) of this section, defer payment of the annual
3 income tax due under the Income Tax Act of 1929, § 26-51-101 et seq. with
4 respect to carrying on or doing business on the entire net income receiving
5 during the income year.
6 (c)(1) The Secretary of the Department of Finance and Administration
7 shall establish a tax-deferral process entitled the "Arkansas Entrepreneur
8 Extension Program".
9 (2) Under the program, the secretary shall create an application
10 process for an applicant to demonstrate eligibility.
11 (3) If the applicant's business qualifies as an eligible new
12 business, the secretary shall grant the eligible new business an extension of
13 no more than five (5) years in which to pay the tax due on the net income of
14 the eligible new business.
15 (4) An eligible new business shall be granted only one (1)
16 extension.
17 (d) The secretary shall promulgate any necessary rules to implement
18 this section.
19
20 SECTION 3. DO NOT CODIFY. EFFECTIVE DATE. This act shall be
21 effective on and after January 1, 2024.
22
23 SECTION 4. DO NOT CODIFY. Rules.
24 (a) When adopting the initial rules required under this Section 2 of
25 this act, the Secretary of the Department of Finance and Administration shall
26 file the final rules with the Secretary of State for adoption under § 25-15-
27 204(f):
28 (1) On or before January 1, 2024; or
29 (2) If approval under § 10-3-309 has not occurred by January 1,
30 2024, as soon as practicable after approval under § 10-3-309.
31 (b) The secretary shall file the proposed rules with the Legislative
32 Council under § 10-3-309(c) sufficiently in advance of January 1, 2024, so
33 that the Legislative Council may consider the rules for approval before
34 January 1, 2024.
35
36
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