(4Q-2025) Arkansas Gov. Sarah Huckabee Sanders is the Natural State’s first female governor. Since taking office in January 2023, Sanders has also distinguished herself by advancing three separate reductions in Arkansas’ top income tax rate from 4.9 to 3.9 percent.
The income tax was reduced from 7.0% to 6.9% in 2013 under Democratic Gov. Mike Beebe (2007-2015). The top rate was reduced from 6.9% to 4.9% under Republican Asa Hutchinson (2015-2023).
Following is a chronology of policy developments under Gov. Sanders.
Election (November 2022)
Sanders was elected Arkansas governor Nov. 8, 2022, with 63 percent of the vote versus Democratic (35%) and Libertarian (2%) candidates. (1) She pledged to lower the state income tax during the campaign.
Inaugural Address (January 2023)
In her inaugural, Gov. Sanders stated, “To help Arkansas businesses grow and create more jobs, we must continue responsibly phasing out the state income tax. I will work with lawmakers to pass an income tax cut this year – and we must keep cutting it, no matter how long it takes, until we eventually wipe the income tax off the books.
She added, “We will no longer surrender our jobs, our talent, our businesses and our economic might to states like Tennessee and Texas that have no income tax. Arkansas is going to fight for every job – and let me be clear, Arkansas is going to win.”
First Income Tax Cut (2023)
In April 2023, Gov. Sanders signed into law a measure cutting individual and corporate income tax rates. The top individual income tax rate was cut from 4.9% to 4.7%. The top corporate rate was cut from 5.3 to 5.1%.
The cuts were funded by surplus revenues in an economic expansion.
Second Income Tax Cut (2023)
In September 2023, Gov. Sanders signed into law a measure cutting individual and corporate income tax rates. The top individual income tax rate was reduced to 4.4%. The top corporate rate was reduced to 4.8%.
The cuts were funded by surplus revenues in an economic expansion.
Third Income Tax Cut (2024)
In June 2024, Gov. Sanders signed into law a measure cutting individual and corporate rates. The top individual income tax rate was cut to 3.9%. The top corporate rate was cut to 4.3%. Both were retroactive to Jan. 1.
The cuts were funded by surplus revenues in an economic expansion.
–Greg Kaza
References
(1) https://www.sos.arkansas.gov/elections/research/election-results
(2) “Sanders Delivers Inaugural Address,” Jan. 10, 2023
https://governor.arkansas.gov/news_post/sanders-delivers-inaugural-address
3) Arkansas Policy Foundation research memos, 2023-25. The Foundation was founded in 1995. The Foundation proposed these ideas in early studies (1995-98). Later research (2001-2025) examined the business cycle’s role in fostering surplus revenues in economic expansions, and revenue declines in contractions.
