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Arkansas Tax and Incentives Update

DFA Hearing Calls Party Foul on Restaurant's Tax-Included Drink Pricing

Posted On: Tuesday, August 08, 2017

While Arkansas Department of Finance and Administration generally tolerates retailers not collecting sales tax as a separately stated amount, sellers need to understand the risk of being required to absorb the tax and pay it out-of-pocket instead of treating the sale as tax-included pricing and backing out the tax from the tax base of gross receipts. Hearing nos. 16-209, 16-210, 16-211 (May 8, 2017) illustrates this risk: A restaurant that also sold mixed drinks claimed a tax-included pricing approach, but this was rejected by the Department, likely effectively increasing the tax imposed by 50%. Read More

Arkansas Tax Reform Task Force Hears Competing Views in July 11 Meeting

Posted On: Friday, July 14, 2017

The Arkansas Tax Reform and Legislative Relief Task Force met on July 11, 2017, for the first round of policy presentations by local and national organizations and to conduct other business. Arkansas Advocates for Children and Families (AACF) led by advocating various measures to benefit low income consumers. AACF criticized recent cuts in personal income tax rates and recommends Arkansas adopt a state earned income tax credit (EITC) based on the federal model. In the sales tax area, AACF recommends increasing taxes on business and reducing taxes on personal consumption. It also recommends increasing state investment in schools, highways, community safety and improving community amenities. With respect to highways, AACF recommends updating the fuel tax structure while offsetting the impact on low income working families using the EITC. AACF’s “Briefing Memo” is available hereRead More

Summary of 2017 Arkansas Property Tax Legislation

Posted On: Wednesday, April 26, 2017

Here is a summary of 2017 Arkansas property tax legislation. The most significant bill is Act 659, a property tax procedure fairness bill supported by the Arkansas State Chamber that should bring significantly more equity to Arkansas property tax disputes.  Read More

Summary of 2017 Arkansas Sales and Use Tax Legislation

Posted On: Wednesday, April 12, 2017

There were relatively limited changes to Arkansas sales and use tax laws in the 2017 legislative session. The big news is Act 465, which phases out the InvestArk sales/use tax credit program while bringing in an exemption for manufacturing partial repairs and replacement parts. While a welcome simplification of the Arkansas tax system, the loss of InvestArk will affect many Arkansas manufacturers. Businesses should consider filing a final InvestArk application by June 30, 2017. Beyond Act 465, the Act 141 expansion of the tax base to include digital products is significant and may affect taxpayers engaged in e-commerce. Read More

Summary of 2017 Arkansas Income Tax Legislation

Posted On: Tuesday, April 11, 2017

With the legislature in recess before returning for sine die in early May, here is a summary of the 2017 income tax legislation. Particularly significant adjustments have been made to passthrough taxation in terms of (1) federal S corporation election conformity, (2) passthrough entity-level apportionment instead of separate allocation, and (3) passthrough withholding on nonresident corporate partners; all are effective January 1, 2018. (If an effective date is not specifically listed, it should be 90 days after adjournment sine die, on or around July 30, 2017.) Read More

The "Arkansas Two-Step": Arkansas Income Tax for Multistate Passthroughs Before and After HB1562

Posted On: Wednesday, March 22, 2017

House Bill 1562, now Act 482, was a technical change to Arkansas taxation of multistate passthrough enterprises that basically conforms the law to what has been common compliance practice of apportionment at the partnership level. Arkansas law will continue to treat the resulting passthrough Arkansas income as allocable up to the partners.  Read More

Manufacturing Process Resumed: DFA Hearing Allows Manufacturing Exemption for Packaging Equipment

Posted On: Monday, February 06, 2017

An Arkansas manufacturer was allowed to claim the manufacturing machinery and equipment exemption on equipment used in preparing goods for shipment in a notable hearing decision issued at the end of 2016. Department of Finance and Administration Hearing nos. 16-444, 16-445 (Dec. 27, 2016). Read More

Gov. Hutchinson Proposes Income Tax Cuts and Revenue Offsets

Posted On: Tuesday, December 13, 2016

Today Governor Hutchinson announced his much-awaited tax cut proposals. There are two main parts. First, income tax cuts for poorest Arkansans. Second, tax exemption for retired military benefits (and a reduction in the soda tax) paid for by an income tax increase on unemployment compensation and sales tax increases on manufactured housing and candy and soft drinks.The main tax cut is rate reductions for poorer Arkansans: Read More

Arkansas Election Aftermath - Incentives & Tax

Posted On: Thursday, November 10, 2016

Some Arkansas tax and incentives updates from the election on Tuesday: Read More

What's the Deal With Ballot Issue #3? (the Economic Development Amendment)

Posted On: Wednesday, October 12, 2016

In a few weeks, Arkansas voters are going to have a chance to approve an amendment to the state constitution that would enhance economic development capabilities at both the state and local levels. Read More


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Recent Posts


Property Tax Equalization Board Appeals Deadline August 21 - August 17, 2017

DFA Hearing Calls Party Foul on Restaurant's Tax-Included Drink Pricing - August 8, 2017

Matt Boch to Discuss Tax Legislation and Reform at the Fayetteville Chamber of Commerce - August 2, 2017


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