Stricken language would be deleted from and underlined language would be added to present law.
1 State of Arkansas Call Item 1
2 94th General Assembly A Bill
3 First Extraordinary Session, 2023 HOUSE BILL 1001
4
5 By: Representatives Eaves, M. Shepherd, Andrews, Beaty Jr., Beck, M. Berry, Brooks, K. Brown,
6 Burkes, Cavenaugh, C. Cooper, Crawford, Fortner, Furman, Gazaway, Haak, Hawk, Hollowell,
7 Ladyman, Long, Lundstrum, Lynch, Maddox, McAlindon, McClure, B. McKenzie, Ray, Rose, Rye,
8 Tosh, Underwood, Unger, Vaught, Wardlaw, Warren, Watson, Wing, Wooten
9 By: Senators J. Dismang, Hickey, J. Boyd, J. Bryant, Caldwell, A. Clark, Crowell, B. Davis, Dees, J.
10 Dotson, J. English, Flippo, Gilmore, K. Hammer, Hester, Hill, Irvin, B. Johnson, M. McKee, J. Payton, C.
11 Penzo, J. Petty, Rice, Stone, D. Sullivan, D. Wallace
12
13 For An Act To Be Entitled
14 AN ACT TO AMEND THE INCOME TAX LAWS; TO REDUCE THE
15 INCOME TAX RATES APPLICABLE TO INDIVIDUALS, TRUSTS,
16 ESTATES, AND CORPORATIONS; TO CREATE AN INFLATIONARY
17 RELIEF INCOME TAX CREDIT FOR CERTAIN TAXPAYERS; TO
18 DECLARE AN EMERGENCY; AND FOR OTHER PURPOSES.
19
20
21 Subtitle
22 TO REDUCE THE INCOME TAX RATES APPLICABLE
23 TO INDIVIDUALS, TRUSTS, ESTATES, AND
24 CORPORATIONS; TO CREATE AN INFLATIONARY
25 RELIEF INCOME TAX CREDIT FOR CERTAIN
26 TAXPAYERS; AND TO DECLARE AN EMERGENCY.
27
28
29 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
30
31 SECTION 1. Arkansas Code § 26-51-201(a)(3), concerning the income tax
32 imposed on individuals, trusts, and estates, is amended to read as follows:
33 (3) For tax years beginning on or after January 1, 2024:
34 (A) Every resident, individual, trust, or estate having
35 net income less than or equal to eighty-seven thousand dollars ($87,000)
36 shall determine the amount of income tax due under this subsection in
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1 accordance with the table set forth below:
2 From Less Than or Equal To Rate
3 $0 $5,099 0%
4 $5,100 $10,299 2%
5 $10,300 $14,699 3%
6 $14,700 $24,299 3.4%
7 $24,300 $87,000 4.4%
8 (B) Every resident, individual, trust, or estate having
9 net income greater than eighty-seven thousand dollars ($87,000) shall
10 determine the amount of income tax due under this subsection in accordance
11 with the table set forth below:
12 From Less Than or Equal To Rate
13 $0 $4,400 2%
14 $4,401 and above 4.4%
15 (C) Every resident, individual, trust, or estate having
16 net income greater than or equal to eighty-seven thousand one dollars
17 ($87,001) but not greater than ninety thousand eight hundred dollars
18 ($90,800) shall reduce the amount of income tax due as determined under
19 subdivision (a)(3)(B) of this section by deducting a bracket adjustment
20 amount in accordance with the table set forth below:
21 From Less Than or Equal To Bracket Adjustment Amount
22 $87,001 $87,100 $380
23 $87,101 $87,200 $370
24 $87,201 $87,300 $360
25 $87,301 $87,400 $350
26 $87,401 $87,500 $340
27 $87,501 $87,600 $330
28 $87,601 $87,700 $320
29 $87,701 $87,800 $310
30 $87,801 $87,900 $300
31 $87,901 $88,000 $290
32 $88,001 $88,100 $280
33 $88,101 $88,200 $270
34 $88,201 $88,300 $260
35 $88,301 $88,400 $250
36 $88,401 $88,500 $240
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1 $88,501 $88,600 $230
2 $88,601 $88,700 $220
3 $88,701 $88,800 $210
4 $88,801 $88,900 $200
5 $88,901 $89,000 $190
6 $89,001 $89,100 $180
7 $89,101 $89,200 $170
8 $89,201 $89,300 $160
9 $89,301 $89,400 $150
10 $89,401 $89,500 $140
11 $89,501 $89,600 $130
12 $89,601 $89,700 $120
13 $89,701 $89,800 $110
14 $89,801 $89,900 $100
15 $89,901 $90,000 $90
16 $90,001 $90,100 $80
17 $90,101 $90,200 $70
18 $90,201 $90,300 $60
19 $90,301 $90,400 $50
20 $90,401 $90,500 $40
21 $90,501 $90,600 $30
22 $90,601 $90,700 $20
23 $90,701 $90,800 $10
24 $90,801 and up $0
25 (4) The tables set forth in subdivisions (a)(1) and (2) (a)(1)-
26 (3) of this section shall be adjusted annually in accordance with the method
27 set forth in subsection (d) of this section.
28
29 SECTION 2. Arkansas Code § 26-51-205(a), concerning the income tax
30 imposed on domestic corporations, is amended to add an additional subdivision
31 to read as follows:
32 (5) For tax years beginning on or after January 1, 2024, every
33 corporation organized under the laws of this state shall pay annually an
34 income tax with respect to carrying on or doing business on the entire net
35 income of the corporation, as now defined by the laws of this state, received
36 by the corporation during the income year, on the following basis:
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1 (A) On the first three thousand dollars ($3,000) of net
2 income or any part thereof, one percent (1%);
3 (B) On the next three thousand dollars ($3,000) of net
4 income or any part thereof, two percent (2%);
5 (C) On the next five thousand dollars ($5,000) of net
6 income or any part thereof, three percent (3%); and
7 (D) On net income exceeding eleven thousand dollars
8 ($11,000), four and eight-tenths percent (4.8%).
9
10 SECTION 3. Arkansas Code § 26-51-205(b), concerning the income tax
11 imposed on foreign corporations, is amended to add an additional subdivision
12 to read as follows:
13 (5) For tax years beginning on or after January 1, 2024, every
14 foreign corporation doing business within the jurisdiction of this state
15 shall pay annually an income tax on the proportion of its entire net income
16 as now defined by the income tax laws of this state, on the following basis:
17 (A) On the first three thousand dollars ($3,000) of net
18 income or any part thereof, one percent (1%);
19 (B) On the next three thousand dollars ($3,000) of net
20 income or any part thereof, two percent (2%);
21 (C) On the next five thousand dollars ($5,000) of net
22 income or any part thereof, three percent (3%); and
23 (D) On net income exceeding eleven thousand dollars
24 ($11,000), four and eight-tenths percent (4.8%).
25
26 SECTION 4. DO NOT CODIFY. TEMPORARY LANGUAGE. Inflationary relief
27 income tax credit.
28 (a) As used in this section, “resident” means natural persons and
29 includes, for the purpose of determining liability for the tax imposed by the
30 Income Tax Act of 1929, § 26-51-101 et seq., upon or with reference to the
31 income of any taxable year, any person domiciled in the State of Arkansas and
32 any other person who maintains a permanent place of abode within this state
33 and spends in the aggregate more than six (6) months of the taxable year
34 within this state.
35 (b)(1)(A) For the tax year beginning January 1, 2023, a resident
36 individual taxpayer who files an Arkansas full-year resident income tax
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1 return, other than a joint return, having net income up to one hundred three
2 thousand six hundred dollars ($103,600) is allowed an income tax credit
3 against the individual income tax imposed by the Income Tax Act of 1929, §
4 26-51-101 et seq., in accordance with the following table:
5 From Less Than or Equal to Credit Amount
6 $1 $89,600 $150
7 $89,601 $90,600 $140
8 $90,601 $91,600 $130
9 $91,601 $92,600 $120
10 $92,601 $93,600 $110
11 $93,601 $94,600 $100
12 $94,601 $95,600 $90
13 $95,601 $96,600 $80
14 $96,601 $97,600 $70
15 $97,601 $98,600 $60
16 $98,601 $99,600 $50
17 $99,601 $100,600 $40
18 $100,601 $101,600 $30
19 $101,601 $102,600 $20
20 $102,601 $103,600 $10
21 $103,601 and up $0
22 (B) Spouses filing separately on the same income tax
23 return may each claim one (1) credit under subdivision (b)(1)(A) of this
24 section against the tax on the return of each spouse.
25 (2)(A) For the tax year beginning January 1, 2023, resident
26 individual taxpayers who file a joint Arkansas full year resident income tax
27 return having net income up to two hundred seven thousand two hundred dollars
28 ($207,200) are allowed an income tax credit against the individual income tax
29 imposed by the Income Tax Act of 1929, § 26-51-101 et seq., in accordance
30 with the following table:
31 From Less Than or Equal to Credit Amount
32 $1 $179,200 $300
33 $179,201 $181,200 $280
34 $181,201 $183,200 $260
35 $183,201 $185,200 $240
36 $185,201 $187,200 $220
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1 $187,201 $189,200 $200
2 $189,201 $191,200 $180
3 $191,201 $193,200 $160
4 $193,201 $195,200 $140
5 $195,201 $197,200 $120
6 $197,201 $199,200 $100
7 $199,201 $201,200 $80
8 $201,201 $203,200 $60
9 $203,201 $205,200 $40
10 $205,201 $207,200 $20
11 $207,201 and up $0
12 (B) Spouses filing jointly on the same income tax return
13 shall receive only one (1) credit under subdivision (b)(2)(A) of this section
14 against their aggregate tax.
15 (c) The income tax credits allowed under subdivisions (b)(1) and (2)
16 of this section shall not be claimed by a taxpayer:
17 (1) For any tax year other than the tax year beginning on
18 January 1, 2023; or
19 (2) Who files a nonresident return or a part-year resident
20 return.
21 (d) The amount of the income tax credit under this section that may be
22 claimed by a taxpayer in a tax year shall not exceed the amount of income tax
23 due by the taxpayer.
24
25 SECTION 5. EMERGENCY CLAUSE. It is found and determined by the
26 General Assembly of the State of Arkansas that this act would create
27 significant changes to the state's income tax laws; that taxpayers and
28 employers plan to meet their obligations on a calendar-year basis; and that
29 this act is immediately necessary to ensure the financial stability of the
30 state, to allow taxpayers and employers time both to plan for and to
31 implement the changes in law created by this act, and to ensure that the
32 Department of Finance and Administration has sufficient time to update its
33 forms and software and train its personnel in accordance with this act.
34 Therefore, an emergency is declared to exist, and this act being immediately
35 necessary for the preservation of the public peace, health, and safety shall
36 become effective on:
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1 (1) The date of its approval by the Governor;
2 (2) If the bill is neither approved nor vetoed by the Governor,
3 the expiration of the period of time during which the Governor may veto the
4 bill; or
5 (3) If the bill is vetoed by the Governor and the veto is
6 overridden, the date the last house overrides the veto.
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Statutes affected: HB 1001: 26-51-201(a), 26-51-205(a), 26-51-205(b)