LITTLE ROCK (KFSM) — Gov. Asa Hutchinson signed a bill on Wednesday (Feb. 1) that is expected to provide $50 million in tax cuts.
Hutchinson pushed the tax cut plan, which focuses on Arkansans who earn between no money and $20,999 annually.
The bill passed the Arkansas Legislature on Monday (Jan. 23).
The total tax cuts come to $50,517,296. The bulk of that amount will affect an estimated 657,000 Arkansans, of which 120,000 taxpayers in the lowest bracket will be taken off the tax rolls completely. Here is the breakdown:
|Bracket||Current Rate||Reduced Rate||Revenue Reduction|
|$0 to $4,299||0.90%||0.00%||$22,283,558|
|$4,300 to $8,399||2.40%||2.00%||$7,508,244|
|$8,400 to $12,599||3.40%||3.00%||$5,617,899|
|$12,600 to $20,999||4.40%||3.40%||$10,898,058|
“I appreciate the legislature’s overwhelming bipartisan support for my $50 million tax cut, and I am proud to be able to sign this bill into law today,” said Hutchinson. “With today’s actions, we will have provided $150 million in substantive income tax relief to nearly 1.3 million Arkansans in the past year. In fact, 90% of the state’s individual income taxpayers will have benefited from substantive tax relief legislation since I took office in 2015.”
The governor also announced he supports exempting all retirement benefits of retired military service members from state income tax, which would amount to a $13 million reduction in general revenue. The governor plans to offset that reduction by repealing other tax exemptions. Those are outlined, here.