EL DORADO, Ark. (KNOE) – The Arkansas State House of Representatives has released a summary of new tax laws that will take effect in 2022.
They come into force on January 1, 2022.
“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% at over the next four years. For the taxation year beginning on January 1, 2022, the maximum rate is reduced to 5.5%. The legislation also provides a $60 non-refundable tax credit for people with incomes below $24,700,” the House of Representatives says.
The following tax measures were adopted by the General Assembly during the 2021 ordinary session:
- ACT 841 Creates an Income Tax Credit for Retired Law Enforcement Officers Who Work for the Arkansas State Police Division to Investigate Cold Cases .
- The ACT 376 reduces the additional registration fee for a hybrid vehicle from $100 to $50.00.
- 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 January 1, 2022 and ending December 31, 2022, the stabilization tax is capped at 0.2%
- ACT 368 amends the definition of “wage” in certain circumstances under the Labor Services Division Act for the rate year commencing January 1, 2022 and ending December 31, 2022, to exclude the amount of compensation that exceeds the lesser of the amount calculated under current 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 state income tax .
- 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 an officer’s family certified law enforcement officer from Arkansas who was killed in service or diagnosed by a medical professional with a terminal illness.
The House of Representatives announced on December 22, 2021 that the seven tax measures would take effect on January 1, 2022.
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