The bill amends the income tax laws in Arkansas to reduce the income tax rates applicable to individuals, trusts, estates, and corporations, effective for tax years beginning on or after January 1, 2023. For individuals, trusts, and estates, the bill introduces a new tax structure with specific income brackets and corresponding rates, including a 0% rate for income up to $5,099 and a 4.7% rate for income up to $87,000. Additionally, it establishes a bracket adjustment for those with incomes slightly above $87,000, allowing for a reduction in the calculated tax based on specific income ranges. The bill also mandates that the tax tables be adjusted annually based on a cost-of-living adjustment.

For corporations, the bill modifies the income tax rates, lowering the rate on net income exceeding $25,000 from 5.3% to 5.1%. This change applies to both domestic and foreign corporations operating within the state. The Secretary of the Department of Finance and Administration is tasked with prescribing the necessary tables for tax calculations, ensuring that the minimum and maximum dollar amounts for each rate bracket are adjusted annually. Overall, the bill aims to provide tax relief to individuals and businesses in Arkansas by lowering tax rates and adjusting brackets to reflect economic conditions.

Statutes affected:
Old version SB549 Original - 3-30-2023 03:01 PM: 26-51-201(a), 26-51-201(d), 26-51-205(a), 26-51-205(b)
Old version SB549 V2 - 4-3-2023 02:43 PM: 26-51-201(a), 26-51-201(d), 26-51-205(a), 26-51-205(b)
SB 549: 26-51-201(a), 26-51-201(d), 26-51-205(a), 26-51-205(b)
Act 532: 26-51-201(a), 26-51-201(d), 26-51-205(a), 26-51-205(b)