The bill amends the penalties associated with non-compliance under the Arkansas Tax Procedure Act. Specifically, it revises the penalty structure for taxpayers who fail to file returns or pay taxes on time. The current maximum penalty of thirty-five percent (35%) for such failures is reduced to ten percent (10%) in the aggregate. This change applies to both general state tax returns and individual income tax returns, where penalties for late filing and late payment are now capped at ten percent (10%) instead of the previous thirty-five percent (35%).

Additionally, the bill clarifies that if a penalty is assessed under one section, no penalty will be assessed under the other for the same failure. However, for individual income tax returns, the penalties can be combined, but still capped at the new ten percent (10%) limit. This legislative change aims to provide a more lenient penalty structure for taxpayers, potentially encouraging compliance with tax obligations.

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