(June 25, 2024) Today’s monthly jobs report provides further evidence of strong growth within Arkansas’ Construction sector, a development noted last week in a Policy Foundation research memo.
“The state’s income tax should be reduced …” Improving Productivity by Reducing Taxes and Taxes and Savings in Arkansas. Arkansas Policy Foundation, 1998 studies
(June 2024) Arkansas Gov. Sarah Huckabee Sanders signed measures June 19
to reduce state individual and corporate income tax rates, and to expand the homestead property tax credit for homeowners using surplus revenues.
The action retroactively reduces the top income tax rate from 4.4% to 3.9% and the corporate rate from 4.8 to 4.3% effective January 1, 2024. The homestead credit will increase from $425 to $500, effective for assessment years beginning on and after January 1, 2024.
The income tax rate has been reduced from 7.0% to 3.9% in the last decade.
Gov. Sanders on Tax Cuts
Gov. Sanders stated, “We’re not quite at Tennessee and Texas levels yet, but we are moving in the right direction and we’re doing so responsibly.”
Three states in the region do not have a state income tax. They are Florida, Tennessee and Texas. The latter two states border Arkansas.
Gov. Sanders said policymakers are enacting the tax cuts in a responsible manner. Legislators also transferred $290 million to a reserve fund during the special session called by Sanders to enact the cuts, effective July 2, 2024.
Tax Cuts for 1.1 Million Taxpayers
The state Department of Finance and Administration (DFA) reported 1.1 million taxpayers earning more than $25,000 would receive the tax cut.
The tax cut measures are SB 1 (sponsor: Sen. Jonathan Dismang, R-Searcy) and HB 1001 (sponsor: Rep. Les Eaves, R-Searcy).
