Stricken language would be deleted from and underlined language would be added to present law. Act 532 of the Regular Session *JLL291* 04-03-2023 14:43:28 JLL291

State of Arkansas As Engrossed: S4/3/23

1 94th General Assembly A Bill

2 Regular Session, 2023

SENATE BILL 549 3

4 By: Senators J. Dismang, J. Boyd, J. Bryant, Caldwell, A. Clark, Crowell, B. Davis, Dees, J. Dotson, J. 5 English, Flippo, Gilmore, K. Hammer, Hester, Hickey, Hill, Irvin, B. Johnson, M. Johnson, M. McKee, J. 6 Payton, C. Penzo, J. Petty, Rice, Stone, G. Stubblefield, D. Sullivan, D. Wallace 7 By: Representatives Eaves, M. Shepherd, Achor, Andrews, Barker, Beaty Jr., Bentley, M. Berry, S. Berry, 8 Brooks, K. Brown, M. Brown, Burkes, Joey Carr, Cavenaugh, C. Cooper, Cozart, Crawford, Dalby, 9 Duffield, Eubanks, Evans, D. Ferguson, C. Fite, L. Fite, Fortner, Furman, Gazaway, Gonzales, Gramlich, 10 Haak, Hawk, D. Hodges, G. Hodges, Holcomb, Hollowell, Jean, L. Johnson, Ladyman, Long, Lundstrum, 11 Lynch, Maddox, Magie, McAlindon, McClure, M. McElroy, McGrew, B. McKenzie, McNair, S. Meeks, 12 Miller, Milligan, J. Moore, K. Moore, Nicks, Painter, Pearce, Pilkington, Puryear, Ray, R. Scott 13 Richardson, Richmond, Rose, Rye, Schulz, Steimel, Tosh, Underwood, Unger, Vaught, Walker, Wardlaw, 14 Warren, Watson, Wing, Womack, Wooldridge, Wooten 15

16 For An Act To Be Entitled 17 AN ACT TO AMEND THE INCOME TAX LAWS; TO REDUCE THE 18 INCOME TAX RATES APPLICABLE TO INDIVIDUALS, TRUSTS, 19 ESTATES, AND CORPORATIONS; AND FOR OTHER PURPOSES. 20

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22 Subtitle 23 TO REDUCE THE INCOME TAX RATES APPLICABLE 24 TO INDIVIDUALS, TRUSTS, ESTATES, AND 25 CORPORATIONS. 26

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28 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 29

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SECTION 1. Arkansas Code § 26-51-201(a)(2), concerning the income tax 31 imposed on individuals, trusts, and estates, is amended to read as follows: 32

(2) For tax years beginning on or after January 1, 2023: 33

(A) Every resident, individual, trust, or estate having 34 net income less than or equal to eighty-seven thousand dollars ($87,000) 35 shall determine the amount of income tax due under this subsection in 36

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accordance with the table set forth below: 1 From

Less Than or Equal To

Rate 2 $0

$5,099

0%

3 $5,100

$10,299

2%

4 $10,300

$14,699

3%

5 $14,700

$24,299

3.4% 6 $24,300

$87,000

4.7% 7

(B) Every resident, individual, trust, or estate having 8 net income greater than eighty-seven thousand dollars ($87,000) shall 9 determine the amount of income tax due under this subsection in accordance 10 with the table set forth below: 11 From

Less Than or Equal To

Rate 12 $0

$4,400

2%

13 $4,401

$8,800

4%

14 $8,801 and above

4.7% 15

(C) Every resident, individual, trust, or estate having 16 net income greater than or equal to eighty-seven thousand one dollars 17 ($87,001) but not greater than ninety-one thousand three hundred dollars 18 ($91,300) shall reduce the amount of income tax due as determined under 19 subdivision (a)(2)(B) of this section by deducting a bracket adjustment 20 amount in accordance with the table set forth below: 21 From

To

Bracket Adjustment Amount 22 $87,001

$87,100

$430 23 $87,101

$87,200

$420 24 $87,201

$87,300

$410 25 $87,301

$87,400

$400 26 $87,401

$87,500

$390 27 $87,501

$87,600

$380 28 $87,601

$87,700

$370 29 $87,701

$87,800

$360 30 $87,801

$87,900

$350 31 $87,901

$88,000

$340 32 $88,001

$88,100

$330 33 $88,101

$88,200

$320 34 $88,201

$88,300

$310 35 $88,301

$88,400

$300 36

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$88,401

$88,500

$290 1 $88,501

$88,600

$280 2 $88,601

$88,700

$270 3 $88,701

$88,800

$260 4 $88,801

$88,900

$250 5 $88,901

$89,000

$240 6 $89,001

$89,100

$230 7 $89,101

$89,200

$220 8 $89,201

$89,300

$210 9 $89,301

$89,400

$200 10 $89,401

$89,500

$190 11 $89,501

$89,600

$180 12 $89,601

$89,700

$170 13 $89,701

$89,800

$160 14 $89,801

$89,900

$150 15 $89,901

$90,000

$140 16 $90,001

$90,100

$130 17 $90,101

$90,200

$120 18 $90,201

$90,300

$110 19 $90,301

$90,400

$100 20 $90,401

$90,500

$90 21 $90,501

$90,600

$80 22 $90,601

$90,700

$70 23 $90,701

$90,800

$60 24 $90,801

$90,900

$50 25 $90,901

$91,000

$40 26 $91,001

$91,100

$30 27 $91,101

$91,200

$20 28 $91,201

$91,300

$10 29 $91,301 and up

$0 30

(3) The tables set forth in subdivision (a)(1) subdivisions 31 (a)(1) and (2) of this section shall be adjusted annually in accordance with 32 the method set forth in subsection (d) of this section. 33

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SECTION 2. Arkansas Code § 26-51-201(d)(1), concerning the income tax 35 imposed on individuals, trusts, and estates, is amended to read as follows: 36

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(d)(1) The Secretary of the Department of Finance and Administration 1 shall prescribe annually a table which tables that shall apply in lieu of the 2 table tables contained in subsection (a) of this section with respect to each 3 succeeding taxable year. The secretary shall increase the minimum and maximum 4 dollar amounts for each rate bracket, rounding to the nearest one hundred 5 dollars ($100), for which a tax is imposed under the table by the cost-of- 6 living adjustment for each calendar year and by not changing the rate 7 applicable to any rate bracket as adjusted. 8

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SECTION 3. Arkansas Code § 26-51-205(a)(4), concerning the income tax 10 imposed on domestic corporations, is amended to read as follows: 11

(4) For tax years beginning on or after January 1, 2023, every 12 corporation organized under the laws of this state shall pay annually an 13 income tax with respect to carrying on or doing business on the entire net 14 income of the corporation, as now defined by the laws of this state, received 15 by the corporation during the income year, on the following basis: 16

(A) On the first three thousand dollars ($3,000) of 17 net income or any part thereof, one percent (1%); 18

(B) On the next three thousand dollars ($3,000) of 19 net income or any part thereof, two percent (2%); 20

(C) On the next five thousand dollars ($5,000) of 21 net income or any part thereof, three percent (3%); 22

(D) On the next fourteen thousand dollars ($14,000) 23 of net income or any part thereof, five percent (5%); and 24

(E) On net income exceeding twenty-five thousand 25 dollars ($25,000), five and three-tenths percent (5.3%) five and one-tenths 26 percent (5.1%). 27

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SECTION 4. Arkansas Code § 26-51-205(b)(4), concerning the income tax 29 imposed on foreign corporations, is amended to read as follows: 30

(4) For tax years beginning on or after January 1, 2023, every 31 foreign corporation doing business within the jurisdiction of this state 32 shall pay annually an income tax on the proportion of its entire net income 33 as now defined by the income tax laws of this state, on the following basis: 34

(A) On the first three thousand dollars ($3,000) of net 35 income or any part thereof, one percent (1%); 36

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(B) On the next three thousand dollars ($3,000) of net 1 income or any part thereof, two percent (2%); 2

(C) On the next five thousand dollars ($5,000) of net 3 income or any part thereof, three percent (3%); 4

(D) On the next fourteen thousand dollars ($14,000) of net 5 income or any part thereof, five percent (5%); and 6

(E) On net income exceeding twenty-five thousand dollars 7 ($25,000), five and three-tenths percent (5.3%) five and one-tenths percent 8 (5.1%). 9

10 /s/J. Dismang 11

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13 APPROVED: 4/10/23 14

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