The bill amends Arkansas income tax law regarding the depreciation and expensing of property by adopting specific provisions from federal income tax law. It incorporates Title 26 U.S.C. sections 167 and 168(a)-(j) as they were effective on January 1, 2019, for property purchased in tax years starting on or after January 1, 2014. Additionally, the bill introduces new provisions by adopting Title 26 U.S.C. 168(k) as it will be effective on January 1, 2024, for property purchased in tax years beginning on or after January 1, 2025. It also adopts Title 26 U.S.C. 179 as it was effective on January 1, 2022, for property purchased in tax years starting on or after January 1, 2022.

Furthermore, the bill increases the amount allowed for the expensing of certain depreciable business assets to align with the amounts permitted under federal law. The effective date for the new provisions outlined in Section 1 of the act is set for tax years beginning on or after January 1, 2025. This legislative change aims to streamline Arkansas tax law with federal standards, potentially benefiting businesses by allowing greater deductions for property depreciation and expensing.

Statutes affected:
HB 1501: 26-51-428(a)