From cutting income tax to lowering the sales tax on used cars, several tax laws passed in 2021 will go into effect on Saturday.
At the last special session, the General Assembly passed Acts 1 and 2, which are identical laws that gradually reduce the top tax rate for individuals from 5.9% to 4.9% over of the next four years. For the taxation year beginning on Saturday, the maximum rate is reduced to 5.5%. The law also provides a non-refundable tax credit of $60 for individuals whose income is less than $24,700.
During the 2021 regular session, the General Assembly adopted the following tax measures, which will come into effect at the beginning of next year:
• ACT 841 creates an income tax credit for retired law enforcement officers who work for the Arkansas State Police Division to investigate cases cold.
• ACT 376 reduces additional registration fees for a hybrid vehicle from $100 to $50.
• ACT 1013 reduces sales tax from 6.5% to 3.5% on used cars priced between $4,000 and $10,000.
• ACT 369 changes the way the stabilization tax is calculated in certain circumstances and provides that, for the year beginning on Saturday and ending on December 31, 2022, the stabilization tax will be capped at 0.2%.
• ACT 368 amends the definition of “wage” in certain circumstances under the Labor Services Division Act for the rate year beginning Saturday and ending December 31, 2022, to exclude the amount of compensation that exceeds the lesser of the amount calculated under the law or $10,000.
• ACT 362 creates the Elective Pass-Through Entity Tax Act, which allows pass-through entities to elect to have their income subject to pass-through entity tax instead of corporate income tax. State.
• ACT 765 creates the Law Enforcement Family Relief Check-off Program, which allows an individual taxpayer to designate a portion or all of the taxpayer’s income tax refund to the program, which assists the family of a law enforcement officer. certified Arkansas law enforcement who was killed in the line of duty or diagnosed by a medical professional with a terminal illness.
Legislation and video archives of presentations and votes on legislation can be viewed at www.arkansashouse.org.
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