Stricken language would be deleted from and underlined language would be added to present law. Act 154 of the Regular Session Act 154 of the Regular Session *JLL123* 02-10-2021 09:57:04 JLL123

State of Arkansas As Engrossed: H2/10/21

1 93rd General Assembly A Bill

2 Regular Session, 2021

SENATE BILL 236 3

4 By: Senators J. Dismang, B. Ballinger, Beckham, Bledsoe, Caldwell, L. Chesterfield, A. Clark, B. Davis, 5 L. Eads, Elliott, J. English, Flippo, S. Flowers, T. Garner, Gilmore, K. Hammer, J. Hendren, Hester, 6 Hickey, Hill, K. Ingram, Irvin, B. Johnson, M. Johnson, G. Leding, M. Pitsch, Rapert, Rice, B. Sample, G. 7 Stubblefield, J. Sturch, D. Sullivan, Teague, C. Tucker, D. Wallace 8 By: Representative Jett 9

10 For An Act To Be Entitled 11 AN ACT TO AMEND THE LAW CONCERNING THE TAX TREATMENT 12 OF UNEMPLOYMENT COMPENSATION BENEFITS; TO EXEMPT 13 UNEMPLOYMENT COMPENSATION BENEFITS FROM INCOME TAX 14 DURING A CERTAIN TIME PERIOD; TO DECLARE AN 15 EMERGENCY; AND FOR OTHER PURPOSES. 16

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18 Subtitle 19 TO EXEMPT UNEMPLOYMENT COMPENSATION 20 BENEFITS FROM INCOME TAX DURING A CERTAIN 21 TIME PERIOD; AND TO DECLARE AN EMERGENCY. 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 § 26-51-404(a)(1)(G) and (H), concerning the 27 income included in gross income under the Income Tax Act of 1929, is amended 28 to read as follows: 29

(G) Unemployment Except as provided in subdivision (b)(31) 30 of this section, unemployment compensation benefits paid from federal 31 unemployment funds; and 32

(H) Unemployment Except as provided in subdivision (b)(32) 33 of this section, unemployment insurance benefits received from unemployment 34 compensation paid under Title IV of the Social Security Act, 42 U.S.C. § 601 35 et seq., except for unemployment or sickness payments made pursuant to 45 36

As Engrossed: H2/10/21 SB236

2 02-10-2021 09:57:04 JLL123

U.S.C. § 352, as it existed on January 1, 2017. 1

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SECTION 2. Arkansas Code § 26-51-404(b), concerning exclusions from 3 gross income under the Income Tax Act of 1929, is amended to add additional 4 subdivisions to read as follows: 5

(31) Unemployment compensation benefits paid from federal 6 unemployment funds for calendar year 2020 or 2021; and 7

(32) Unemployment insurance benefits described in subdivision 8 (a)(1)(H) of this section and paid for calendar year 2020 or 2021. 9

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SECTION 3. EMERGENCY CLAUSE. It is found and determined by the 11 General Assembly of the State of Arkansas that the coronavirus 2019 (COVID- 12 19) pandemic caused high levels of unemployment and an economic crisis in the 13 state; that the state and federal government expanded unemployment 14 compensation efforts to support workers who were negatively affected by the 15 business closures resulting from the pandemic in an effort to prevent further 16 economic collapse; that unemployment compensation benefits are currently 17 subject to income tax under state law; that unless an income tax exemption is 18 provided for unemployment compensation benefits during the pandemic, 19 Arkansans will face further financial distress, which will hinder the state's 20 efforts in effecting an economic recovery; and that this act is immediately 21 necessary because Arkansans are facing imminent financial peril and exempting 22 unemployment compensation benefits from income tax during the pandemic will 23 assist the state and its residents with their economic recovery, which is 24 necessary to the public peace, health, and safety. Therefore, an emergency is 25 declared to exist, and this act being immediately necessary for the 26 preservation of the public peace, health, and safety shall become effective 27 on: 28

(1) The date of its approval by the Governor; 29

(2) If the bill is neither approved nor vetoed by the Governor, 30 the expiration of the period of time during which the Governor may veto the 31 bill; or 32

(3) If the bill is vetoed by the Governor and the veto is 33 overridden, the date the last house overrides the veto. 34

35 APPROVED: 3/1/21 36