Dynamic Revenue Modeling Testimony Raises More Questions Than It Answers

The Arkansas Tax Reform and Relief Legislative Task Force met today (August 6) to hear the results of its contracted dynamic revenue modeling. The results were not groundbreaking and generally showed that the state could expect that the net costs of its proposed tax cuts and reforms should be somewhat less than the static revenue impacts projected by the Department of Finance and Administration ("DFA"), perhaps something on the order of 5% depending on the specific proposals and modeling assumptions. The business community should be concerned that the dynamic scoring will skew the Task Force's recommendations more toward income tax rate cuts rather than including the apportionment, net operating losses (NOLs), and inventory tax reforms that are vital for encouraging Arkansas investment from multistate businesses. [More]

Mixed Messages on Arkansas Implementation of Wayfair for Remote Sellers

While there have been no fundamental changes since our prior post on the state's options for taking advantage of Wayfair's termination of the physical presence nexus rule, evolving discussions and inconsistent guidance warrant an update: State leaders are still evaluating their options and appear to be leaning toward legislation in the 2019 legislative session. Informal DFA interim guidance indicating that remote sellers should collect does not appear to be supported by any actual binding law. [More]

How Will Arkansas Respond to the Wayfair Decision?

With the recent Supreme Court decision in Wayfair having removed the traditional physical presence nexus rule, states are determining how to respond and move ahead in ramping up efforts to collect sales and use taxes from remote sellers. While Arkansas does not have a South Dakota-style economic nexus status on the books and ready to come into effect, as a Streamlined Sales Tax state, Arkansas is well positioned to adopt a regulatory or statutory change to require remote sellers to collect tax. [More]

Tax Reform Task Force Members Nominate Excise Tax Proposals, Vote on Property Tax Proposals, and Prioritize $200 Million of Cuts and Reforms

The Arkansas Tax Reform and Relief Legislative Task Force met again June 20 and 21. The extensive proceedings included consideration of property tax proposals, hearing excise testimony and nominating proposals, and having the members individually attempt to prioritize $200 million of tax reform and relief. The Task Force will meet again this coming Tuesday and Wednesday, June 26 and 27, to work over the results of their individual rankings and to identify which proposals to submit for dynamic scoring. [More]