The Remote and Mobile Work Modernization and Competitiveness Act aims to amend Arkansas's income tax laws to better accommodate remote and mobile employees, particularly nonresidents. The bill introduces several key provisions, including exemptions from income tax for certain remote and mobile employees earning $2,500 or less while working in the state, as well as exemptions for employers from withholding income tax for employees who work in multiple states or for a limited number of days in Arkansas. Additionally, the Department of Finance and Administration is authorized to enter into reciprocity agreements with other states to exempt residents of those states from Arkansas income tax if their home state offers similar exemptions for Arkansas residents.

The bill also outlines the conditions under which employers are not liable for failing to withhold income tax from employees who perform duties in multiple states, provided they maintain a time and attendance system or rely on reasonable determinations regarding employee work locations. The act emphasizes the need for a more hospitable tax code to attract remote workers, addressing concerns about the burdensome nature of current tax filing and withholding requirements. The provisions of the act are set to take effect for tax years beginning on or after January 1, 2026.

Statutes affected:
Old version HB1116 V2 - 3-13-2025 09:45 AM: 26-51-202
Old version HB1116 Original - 1-14-2025 09:28 AM: 26-51-202
HB 1116: 26-51-202