LITTLE ROCK, Ark. (AP) — Arkansas lawmakers will study a variety of proposals to change the state’s individual income and corporate income tax laws.
The legislative tax overhaul task force voted Wednesday to study most of the 31 proposals that panel members individually submitted two weeks ago, the Arkansas Democrat-Gazette reported.
One proposal would cut the state’s top individual income tax rate from 6.9 percent to 5.9 percent, which the state Department of Finance and Administration estimated would reduce revenue by nearly $225 million a year.
“We have got to get our (individual income tax) tables sort out first and then we can make the decision about how much we can afford to drop the top rate or combine it with an (earned income tax cred) or whatever,” said Republican Sen. Jim Hendren, a task force co-chairman.
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Gov. Asa Hutchinson said in February that he wants lawmakers to cut the top individual income tax rate effective January 2020. Hutchinson plans to finance the cut through economic growth and savings through budget constraints.
The task force decided to drop studying the possibility of raising the reduced sales tax on groceries, said Republican Rep. Lane Jean, the other task force co-chairman. That study would be coupled with creating a refundable tax credit for low- to moderate-income people to offset the increased taxes.
Hutchinson wrote a letter to the task force three weeks ago opposing sales tax increase on groceries, which is currently 1.5 percent.
Task force recommendations are due Sept. 1 to Hutchinson and the Legislature.
Information from: Arkansas Democrat-Gazette, http://www.arkansasonline.com