Referred to as a “signature issue of this year’s session,” Governor Asa Hutchinson and legislators have introduce a bill to lower personal income tax for Arkansans.
The bill, Senate Bill 211, was filed Jan. 30, is currently before the legislature’s House Revenue and Taxation Committee. The bill is sponsored by Senators Senator Jonathan Dismang (R) of Bebee and Jim Hendren (R) of Gravette. House sponsors are Representatives Joe Jett (R) of Success and Matthew J. Shepherd (R) of El Dorado.
A statement on the legislation was that the proposal would lower the top marginal rate from 6.9 percent to 6.6 percent the first year, which would be calendar year 2020. Then the rate would drop to 5.9 percent, beginning in 2021. The governor assured legislators that no one would pay more income tax due to being bumped into a higher bracket.
When fully in place, the reduction would save Arkansas taxpayers about $97 million a year. The top rate in Arkansas would be lower than in Louisiana, South Carolina and Georgia and equal to the top rate in Missouri.
The statement continues: SB 211 is the culmination of two years of work that began soon after the General Assembly adjourned the 2017 regular session. One goal of SB 211 is to provide tax relief to the taxpayers who were not included in the major tax cuts enacted by the legislature in 2015 and 2017.
The legislature lowered taxes for middle-income families in 2015, saving them about $100 million a year. The legislature next focused on low-income families, who saved about $50 million a year from tax cuts enacted in 2017.
The Governor has stated he is prepared to sign the bill.