Arkansas Gov. Sanders signs legislation cutting state’s income and property taxes

Christina Randall
·2 min read
5

FAYETTEVILLE, Ark. (KNWA/KFTA) — Arkansas Gov. Sarah Huckabee Sanders signed legislation on June 19 cutting the state’s income and property taxes.

“The legislature just lowered that by half a percentage point down from 4.4% to 3.9%,” said Scott Hardin, spokesperson for the Department of Finance and Administration.

This will impact Arkansans who make $25,000 or more. According to Hardin, about 1.1 million taxpayers in the state will benefit from this, and taxpayers will continue to benefit from it in future years.

“Next year, they will keep an additional $256 million in their pockets because of that tax cut. And that’s not just next year. That’s every year going forward,” said Hardin.

Hardin says the tax cut can be figured out by subtracting a 2024 tax rate from a 2023 tax rate. For example, someone who makes around $56,000 a year can expect to save between $200 to $280. Income isn’t the only thing affected. The top corporate rate is being cut from 4.8% to 4.3%.

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“That’s going to say there are about 7,800 companies that are going to benefit from that, and they’re going to save about $66 million a year moving forward,” said Hardin.

Supporters of the tax cuts say the state is in a healthy position to do so economically.

“I think Arkansans should be proud to know their state is doing well, meaning the economy is doing well. We’re collecting more money than we anticipated,” said Hardin.

However, those opposed believe the state should fund services to help issues such as the high maternal mortality rate.

I know there is so much more work we need to do to fund our programs better in the state, so I’m a ‘no’ on tax cuts until I feel like people are getting the services they need,” said State Rep. Nicole Clowney, (D-Fayetteville).

The tax cuts are retroactive to January 1 of this year.

When Arkansans file their taxes next year, they’ll see that $250 million when they file in 2025 for tax year 2024,” said Hardin.

Sanders also increased the homestead tax credit from $425 to $500. The tax cut is expected to cost $46 million.

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