The special session of the Arkansas legislature begins on Tuesday

A special session of the Arkansas Legislature will begin at 10 a.m. on Tuesday. Gov. Asa Hutchinson officially called for session on Friday with lawmakers to consider a major tax cut bill. He also added seven other invoices to the appeal.

“The main reason for the session is the tax cut bill,” Hutchinson said. “I have spoken with both Speaker of the House Matthew Shepard and Senate Pro Tem Jimmy Hickey, and they confirm that we have more than a majority vote on tax bills to get this passed. They feel confident with the support for it.

The primary tax cut bill would reduce the top tax rate for Arkansans from 5.9% to 4.9% over the next four years. The personal income tax rate will drop from 5.9% to 5.5% for fiscal year 2022 and to 5.3% for fiscal year 2023.

There are trigger mechanisms based on certain income projections to reduce the rate to 5.1% in tax year 2024 and 4.9% in tax year 2025.

If approved, the law would combine the lower and middle income tax tables, while providing a non-refundable tax credit of $ 60 to those with income below $ 24,700.

“This bill puts us in a competitive position with other states,” Hutchinson said. “I pushed to try to get down to 5%, and it looks like we’re going to be able to get down to 4.9%.”

Lawmakers have accumulated a budget surplus of about $ 1.2 billion and will use the funds from the surplus to cut rates.

The other seven invoices in the appeal include:

  • Fund Transfers – State funds in various state government accounts should be transferred to restricted reserve funds, general purpose reserve account, and quick action closing fund.
  • Appropriation Bill – This bill allows more federal US bailout money to flow into Arkansas where it’s needed.
  • Insulin Bill – Law 1104 which was passed during the Ordinary Session amended the laws relating to insulin discounts. Since the passage, it was determined that it had unintended consequences. The goal is to repeal this bill.
  • LLC Bill – Law 1041, regarding LLC Laws, was passed in the Ordinary Session. It has now been determined that there is a drafting problem, and this amendment will rectify the problem.
  • Tax Appeals Commission – Law 586 of 2021 established the Independent Tax Appeals Commission. This bill seeks to correct certain terms of the original law.
  • Modification of tax incentives – This bill modifies the income tax credit for waste reduction, reuse or recycling equipment in order to allow the use of these credits by an eligible growth project.
  • General Assembly security personnel – This bill allows both chambers to hire and employ security personnel.

Several lawmakers have promised to come up with additional measures not requested by the governor, such as restricting abortion rights and reducing the teaching of critical race theory. A two-thirds vote of the members in both houses is required to go beyond the points called by the governor for an extraordinary session.

Senator Jonathan Dissman, R-Beebe, was a guest on the latest episode of Talk Business & Politics. He is co-chairman of the joint budget committee, vice-chairman of the Senate income and tax committee, and is one of the main authors of the tax reform bill.

You can watch her full interview in the video below.

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