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Arkansas Tax and Incentives Update

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

Caution! Income Tax Apportionment Bill (MTC UDITPA Amendments) Advancing Quickly

Posted On: Thursday, March 09, 2017

Among the hundreds of bills filed on the March 6 deadline was HB2100, sponsored by House Revenue & Taxation Committee Chair Joe Jett. This is a Department of Finance and Administration bill that takes up the model amendments to the Uniform Division for Income Tax Purposes Act (UDITPA) that were adopted by the Multistate Tax Commission (MTC) in 2015. The legislation makes significant changes to Arkansas apportionment, particularly for receipts from services and intangibles. The expansion of the throwback rule and the adoption of a throwout rule particularly stand out for concern. Any affected taxpayers interested in adjusting the bill should act soon: the legislation already has moved out of the House Revenue & Taxation Committee and could be heard on the House floor next week. Read More

Arkansas Tax Legislation Update: Governor's Tax Cuts, Digital Goods, and More

Posted On: Wednesday, January 25, 2017

With the legislative session in full swing, some updates on Arkansas tax legislation:
 Read More

DFA Hearing Highlights Proration Tax Trap for Nonresident Individuals with Tax Credits

Posted On: Sunday, December 18, 2016

If there's one thing that it would seem safe to assume, it is that a credit is a dollar-for-dollar reduction in tax liability, right? Not for nonresident individuals filing in Arkansas. A recent Department of Finance and Administration administrative hearing decision, no. 17-113 (Dec. 16, 2016), illustrates the state's problematic proration requirement for tax credits claimed by nonresident individuals. 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 Tax Traps and Found Money in Little Rock on November 16

Posted On: Sunday, September 18, 2016

We're bringing it home: The Dover Dixon Horne state tax team (Michael Parker, Matt Boch, & T.J. Lawhon) is going to present our "Arkansas Tax Traps and Found Money" seminar at the Arkansas State Chamber in Little Rock on November 16, 2016.  Read More

Arkansas DFA "Vodafones" Taxpayer's Refund Claims

Posted On: Sunday, July 10, 2016

Make sure that you get your apportionment right on the original return:  In a Department of Finance and Administration hearing decision, nos. 16-202 and 16-203 (May 27, 2016), the administrative law judge upheld the use of alternative apportionment to deny a refund claim.  The facts unfortunately resemble the unfairness of Tennessee's Vodafone case: The taxpayer realized that the wrong sourcing methodology had been used on the original returns and filed refund claims claiming the benefit of the statutory methodology. The tax administrator invoked alternative apportionment (Ark. Code Ann.ยง 26-51-718) to require the original return methodology and thereby deny the claims. Read More

Arkansas Tax Traps & Found Money Seminars June 9, 16 & 21 in Bentonville, Ft. Smith & Jonesboro

Posted On: Saturday, March 05, 2016

Working with local chambers of commerce, the Arkansas State Chamber of Commerce / Associated Industries of Arkansas (ASCC/AIA) and Dover Dixon Horne are sponsoring three half-day seminars in June 2016 in Northwest Arkansas, the River Valley region, and Northeast Arkansas. The programs will highlight often-overlooked traps and opportunities in Arkansas taxes and incentives. The DDH tax team of Mike Parker, Matt Boch, and T.J. Lawhon will present the seminars. Read More


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Recent Posts


Will the FLIS Enterprises Case Be a Refund Opportunity for Sales Tax on Withdrawals from Stock? - June 1, 2017

Arkansas Tax Reform Task Force Gearing Up - May 29, 2017

Summary of 2017 Tax and Incentives Legislation - May 20, 2017


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