“Arkansas would benefit from comprehensive, pro-growth reform; Arkansans are not under-taxed; taxes and rates do matter to entrepreneurs; dynamic scoring of tax changes and effects provides benefits.” Arkansas Policy Foundation Mission Statement
(December 2021) A pending proposal to reduce Arkansas’ top income tax rate from 5.9% to 4.9% would improve the state economy’s competitive position in the 12-state Southeast region, Federation of Tax Administrators records show.
| Pre-Tax Cut
South Carolina |
7.00% |
| West Virginia | 6.5% |
| Louisiana | 6.0% |
| Arkansas | 5.9% |
| Georgia and Virginia | 5.75% |
| North Carolina | 5.25% |
| Alabama, Kentucky and Mississippi | 5.0% |
| Florida and Tennessee | No state income tax |
| Post-Tax Cut
South Carolina |
7.00% |
| West Virginia | 6.5% |
| Louisiana | 6.0% |
| Georgia and Virginia | 5.75% |
| North Carolina | 5.25% |
| Alabama, Kentucky and Mississippi | 5.0% |
| Arkansas | 4.9% |
| Florida and Tennessee | No state income tax |
Arkansas’ position would also improve versus border states.
| Pre-Tax Cut
Louisiana |
6.0% |
| Arkansas | 5.9% |
| Missouri | 5.4% |
| Mississippi and Oklahoma | 5.0% |
| Tennessee and Texas | No state income tax |
|
Post-Tax Cut Louisiana |
6.0% |
| Missouri | 5.4% |
| Mississippi and Oklahoma | 5.0% |
| Arkansas | 4.9% |
| Tennessee and Texas | No state income tax |
Arkansas Gov. Asa Hutchinson has announced his intention to call a special legislative session in December to lower state income tax rates.
Tax rates are a factor of economic development, along with a skilled work force, infrastructure, non-arbitrary regulatory environment and other issues that vary from state to state.
— Greg Kaza
Source: State Individual Income Tax Rates – January 1, 2021 (taxadmin.org)
