Stricken language would be deleted from and underlined language would be added to present law. Act 1459 of the Regular Session *JLL227* 02-27-2013 11:58:06 JLL227

State of Arkansas As Engrossed: H3/13/13 H4/1/13 S4/18/13

1 89th General Assembly A Bill

2 Regular Session, 2013

HOUSE BILL 1585 3

4 By: Representatives Collins, D. Altes, Baird, Ballinger, Bell, Bragg, J. Burris, Carter, Clemmer, Cozart, 5 Davis, Deffenbaugh, Dotson, C. Douglas, Farrer, Fite, Gossage, Hammer, Harris, Hickerson, Hobbs, 6 House, Lea, Lowery, D. Meeks, S. Meeks, Miller, Neal, Payton, Scott, Shepherd, Westerman 7 By: Senators D. Sanders, Rapert 8

9 For An Act To Be Entitled 10 AN ACT TO AMEND THE INCOME TAX RATES AND BRACKETS FOR 11 INDIVIDUALS, TRUSTS, AND ESTATES; TO ADJUST THE 12 MINIMUM AND MAXIMUM DOLLAR AMOUNTS IN CERTAIN INCOME 13 TAX BRACKETS FOR INDIVIDUALS, TRUSTS, AND ESTATES; 14 AND FOR OTHER PURPOSES. 15

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17 Subtitle 18 TO AMEND THE INCOME TAX RATES AND 19 BRACKETS; AND TO ADJUST THE MINIMUM AND 20 MAXIMUM DOLLAR AMOUNTS IN CERTAIN INCOME 21 TAX BRACKETS. 22

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24 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 25

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SECTION 1. Arkansas Code § 26-51-201(a), concerning the income tax on 27 individuals, trusts, and estates, is amended to read as follows: 28

(a) A For tax years beginning on and after January 1, 2012, a tax is 29 imposed upon, and with respect to, the entire income of every resident, 30 individual, trust, or estate. The tax shall be levied, collected, and paid 31 annually upon the entire net income as defined and computed in this chapter 32 at the following rates, giving effect to the tax credits provided hereafter, 33 in the manner set forth: 34

(1)(A) On the first two thousand nine hundred ninety-nine 35 dollars ($2,999) four thousand ninety-nine dollars ($4,099) of net income or 36

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any part thereof, one percent (1%);. 1

(B) For tax years beginning on and after January 1, 2014, 2 on the first four thousand ninety-nine dollars ($4,099) of net income or any 3 part thereof, nine-tenths percent (0.9%); 4

(2)(A) On the next three thousand dollars ($3,000) four thousand 5 one hundred dollars ($4,100) of net income or any part thereof, two and one- 6 half percent (2½%); two and five-tenths percent (2.5%). 7

(B) For tax years beginning on and after January 1, 2015, 8 on the next four thousand one hundred dollars ($4,100) of net income or any 9 part thereof, two and four-tenths percent (2.4%); 10

(3)(A) On the next three thousand dollars ($3,000) four thousand 11 dollars ($4,000) of net income or any part thereof, three and one-half 12 percent (3½%); three and five-tenths percent (3.5%). 13

(B) For tax years beginning on and after January 1, 2015, 14 on the next four thousand dollars ($4,000) of net income or any part thereof, 15 three and four-tenths percent (3.4%); 16

(4)(A) On the next six thousand dollars ($6,000) eight thousand 17 two hundred dollars ($8,200) of net income or any part thereof, four and one- 18 half percent (4½%); four and five-tenths percent (4.5%). 19

(B) For tax years beginning on and after January 1, 2015, 20 on the next eight thousand two hundred dollars ($8,200) of net income or any 21 part thereof, four and four-tenths percent (4.4%); 22

(5)(A) On the next ten thousand dollars ($10,000) thirteen 23 thousand six hundred dollars ($13,600) of net income or any part thereof, six 24 percent (6%); and. 25

(B) For tax years beginning on and after January 1, 2015, 26 on the next thirteen thousand six hundred dollars ($13,600) of net income or 27 any part thereof, five and nine-tenths percent (5.9%); and 28

(6)(A) On net income of twenty-five thousand dollars ($25,000) 29 thirty-four thousand dollars ($34,000) and above, seven percent (7%). 30

(B) For tax years beginning on and after January 1, 2015, 31 on net income of thirty-four thousand dollars ($34,000) and above, six and 32 nine-tenths percent (6.9%). 33

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SECTION 2. Arkansas Code § 26-51-201(d), concerning the cost-of-living 35 adjustment for the income tax rates applicable to individuals, trusts, and 36

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estates, is amended to read as follows: 1

(d)(1) Not later than December 15 of 1998, and each subsequent 2 calendar year, the The Director of the Department of Finance and 3 Administration shall prescribe annually a table which shall apply in lieu of 4 the table contained in subsection (a) of this section with respect to each 5 succeeding taxable years beginning in the succeeding calendar year. The 6 Director of the Department of Finance and Administration director shall 7 increase the minimum and maximum dollar amounts for each rate bracket, 8 rounding to the nearest one hundred dollars ($100), for which a tax is 9 imposed under such the table by the cost-of-living adjustment for such each 10 calendar year and by not changing the rate applicable to any rate bracket as 11 adjusted. The yearly cost-of-living adjustment increase in each rate bracket 12 as provided in subdivision (d)(2) of this section shall apply to the brackets 13 as contained in subsection (a) of this section as in effect on January 1, 14 1998. 15

(2) For purposes of subdivision (d)(1) of this section, the 16 cost-of-living adjustment for any a calendar year is the percentage, if any, 17 by which the CPI for the current calendar year preceding the taxable year 18 exceeds the CPI for the preceding calendar year 1997, not to exceed three 19 percent (3%). The CPI for any calendar year is the average of the Consumer 20 Price Index as of the close of the twelve-month period ending on August 31 of 21 such calendar year. “Consumer Price Index” means the last Consumer Price 22 Index for All Urban Consumers published by the United States Department of 23 Labor. 24

(3) The new tables, as adjusted annually, shall apply for tax 25 returns filed for taxable year 1999 and thereafter, and shall be used by the 26 director in preparing the income tax withholding tables pursuant to § 26-51- 27 907. 28

29 /s/Collins 30

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32 APPROVED: 04/22/2013 33

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