Arkansas’ corporate tax gap – Axios NW Arkansas

Arkansas individuals paid about 78% more in income taxes during calendar year 2022 than corporations, according to the state Department of Finance and Administration.

• Companies paid roughly $872 million, while individuals shelled out more than $3.96 billion.

State of play: The numbers are set against the backdrop of Gov. Sarah Huckabee Sanders’ goal to eliminate individual income taxes.

• She hasn’t specified how the revenue would be replaced, but in her inauguration speech, the governor said she wants to cut “wasteful spending,” and acted later that day with executive orders freezing state government hiring and seeking to reduce fraud of unemployment benefits.

Of note: Arkansas Advocates for Children and Families argues that income tax cuts will disproportionately impact children and people with lower incomes.

Context: Former Gov. Asa Hutchinson lowered the individual income tax to 4.9% from 5.9% last August, making the cut retroactive to Jan. 1, 2022.

• The rate is the lowest in state history.
• The top corporate tax rate fell to 5.3% from 5.9% on Jan. 1.

The latest: The Department of Finance and Administration is accepting paper returns for tax year 2022. Electronic returns will be accepted beginning Jan. 23.

• The last day to file your state income tax return or for an extension is April 18.