This bill proposes significant amendments to Arkansas's income tax laws, primarily aimed at reducing tax rates for individuals, trusts, estates, and corporations, effective for tax years beginning on or after January 1, 2024. The bill introduces a new income tax structure for individuals and estates, establishing a tiered tax rate system based on net income, with specific rates outlined for income brackets up to $90,800. Additionally, it includes provisions for a bracket adjustment for those with incomes slightly above $87,000, allowing for a reduction in tax liability. The corporate tax structure is also revised, with new rates established for both domestic and foreign corporations based on their net income.

Furthermore, the bill creates an inflationary relief income tax credit for certain taxpayers, which is applicable for the tax year beginning January 1, 2023. This credit is designed to provide financial relief to individual taxpayers based on their net income, with specific credit amounts outlined for various income thresholds. The bill also includes an emergency clause, indicating the immediate necessity of these changes for the financial stability of the state and to allow adequate time for taxpayers and the Department of Finance and Administration to adjust to the new regulations.

Statutes affected:
HB 1007: 26-51-201(a), 26-51-205(a), 26-51-205(b)