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Senate Bill Proposes Major Changes to State Tax Laws

Senate

A bill has been filed in the Arkansas Legislature today that aims to reform the state tax laws, require sales tax collection for online retailers, and amend multiple tax laws and acts.’

Sen. Bart Hester (R-Cave Springs) filed the bill, which has been named SB576, to modernize the state’s tax code.

According to the bill, the Arkansas Tax Reform and Relief Legislative Task Force is recommending that the state’s tax laws be simplified in order to make Arkansas more competitive with surrounding states, to create more jobs, and to “ensure fairness to all taxpayers.”  The task force highlights the difficulty of collecting online sales tax as a major hurdle, and one that is “causing revenue losses and imminent harm to the state through loss of critical funding for state and local services.”

In the bill, the task force recommends passing the savings generated by tax reforms onto Arkansas taxpayers. Any revenue savings, according to the bill, should be matched by “corresponding changes to reduce the tax burden for Arkansas taxpayers.”

Hester’s bill proposes a major reform of Arkansas’ tax code, from business deductions for net operating loss, to reform of the Multistate Tax Compact, to the net income of financial institutions, and more.

One of the major sections of the bill is the requirement that online sellers be required to “collect and remit the applicable sales tax” that is levied by the state. If an online seller has sales exceeding $100,000 or 200 transactions in the previous or current calendar year, the seller will be required to remit sales tax.

The bill also has a provision for car wash operators who utilize water from a public water system. Under this bill, the operator would be required to pay a fee to the Department of Finance and Administration. This fee would be determined by the number of car wash tunnels, self-service bays, and automatic car washes that the owner operates.

READ MORE: Arkansas Labor Force Report

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