The bill amends the penalties associated with non-compliance under the Arkansas Tax Procedure Act. Specifically, it reduces the maximum penalty for failing to file tax returns and failing to pay taxes from thirty-five percent (35%) to ten percent (10%) in the aggregate. This change applies to both general state tax returns and individual income tax returns, where the penalties for late filing and late payment are structured to add five percent (5%) for the first month of delay and an additional five percent (5%) for each subsequent month, capped at the new ten percent (10%) limit.

Additionally, the bill clarifies that if a penalty is assessed under one section, no penalty will be assessed under the other for the same tax period, ensuring that taxpayers are not penalized multiple times for the same failure. The adjustments aim to provide a more lenient penalty structure for taxpayers who may face challenges in meeting their tax obligations, while still encouraging compliance with state tax laws.

Statutes affected:
HB 1904: 26-18-208(1)