The bill amends the Arkansas Income Tax Withholding Act of 1965 to streamline the electronic filing requirements for employers regarding income tax withholding statements. Specifically, it reduces the threshold for mandatory electronic filing from 125 employees to 75 employees, making it easier for smaller businesses to comply with tax regulations. Additionally, the bill mandates that employers required to file annual withholding statements electronically must also file their withholding returns electronically. It introduces provisions for businesses that report and remit withholding taxes on behalf of other employers, requiring them to file electronically if the primary employer is subject to the electronic filing requirement.

Furthermore, the bill allows the Secretary of the Department of Finance and Administration to waive the electronic filing requirement if it poses an undue hardship on the employer. The effective dates for the new provisions are set for tax years beginning on or after January 1, 2025, for the employee threshold change, and January 1, 2026, for the electronic filing requirements. This legislation aims to modernize the tax filing process and reduce the administrative burden on employers while ensuring compliance with state tax laws.

Statutes affected:
SB 503: 26-51-908, 26-51-909(b)