Signed by Governor Sarah Huckabee Sanders

Vote Smart's Synopsis:

Vote to pass a bill that reduces the state income tax rates for individuals, trusts, estates, and corporations in Arkansas.

Highlights:

• Establishes the following income tax rates for residents, individuals, trusts, and estates with a net income less than $94,700, beginning January 1, 2026 (Sec. 1):

• 0% on the first $5,599 of income;

• 2% on income between $5,600 and $11,199;

• 3% on income between $11,200 and $15,999;

• 3.4% on income between $16,000 and $26,399; and

• 3.7% on income between $26,400 and $94,700.

• Establishes an income tax rate for residents, individuals, trusts, and estates with a net income greater than $94,700 of 2% for the first $4,700 of income, and 3.7% for all income above $4,700 (Sec. 1).

• Establishes bracket adjustments for residents, individuals, trusts, and estates with a net income between $94,700 and $97,600 ranging from $10-$290 (Sec. 1).

• Establishes the following income tax rates for corporations beginning January 1, 2027 (Sec. 2):

• 1% on the first $3,000 of income;

• 2% on the next $3,000 of income;

• 3% on the next $5,000 of income; and

• 4.1% on all income over $11,000.

• Specifies that foreign corporations conducting business in the state shall pay income tax at the same rates specified in Section 2 beginning January 1, 2027 (Sec. 3).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that reduces the state income tax rates for individuals, trusts, estates, and corporations in Arkansas.

Highlights:

• Establishes the following income tax rates for residents, individuals, trusts, and estates with a net income less than $94,700, beginning January 1, 2026 (Sec. 1):

• 0% on the first $5,599 of income;

• 2% on income between $5,600 and $11,199;

• 3% on income between $11,200 and $15,999;

• 3.4% on income between $16,000 and $26,399; and

• 3.7% on income between $26,400 and $94,700.

• Establishes an income tax rate for residents, individuals, trusts, and estates with a net income greater than $94,700 of 2% for the first $4,700 of income, and 3.7% for all income above $4,700 (Sec. 1).

• Establishes bracket adjustments for residents, individuals, trusts, and estates with a net income between $94,700 and $97,600 ranging from $10-$290 (Sec. 1).

• Establishes the following income tax rates for corporations beginning January 1, 2027 (Sec. 2):

• 1% on the first $3,000 of income;

• 2% on the next $3,000 of income;

• 3% on the next $5,000 of income; and

• 4.1% on all income over $11,000.

• Specifies that foreign corporations conducting business in the state shall pay income tax at the same rates specified in Section 2 beginning January 1, 2027 (Sec. 3).

Full Bill Text