Arkansas lawmakers moved closer to enacting a fresh round of tax cuts Tuesday, as both legislative chambers overwhelmingly approved measures to lower the state’s top individual and corporate income tax rates.
The legislation, a key priority of Gov. Sarah Huckabee Sanders’ special session, passed largely along party lines. The plan reduces the top individual income tax rate from 3.9% to 3.7%, retroactive to Jan. 1, 2026. It also trims the top corporate rate from 4.3% to 4.1% beginning in 2027.
Republican proponents, including Rep. Les Eaves of Searcy, characterized the bills as “broad-based tax relief” for working residents, according to the Arkansas Advocate. The Department of Finance and Administration estimates that roughly 1.1 million taxpayers will see a reduction.
However, the proposal faced sharp pushback from Democrats. Sen. Greg Leding of Fayetteville argued the state is ignoring “obvious problems” like healthcare and infrastructure to fund the cuts. Opponents also noted that the move is projected to reduce state general revenues by $191.8 million in fiscal 2027, potentially shrinking a projected $310 million surplus.
Final votes are expected Wednesday. If passed, the measures will head to Sanders’ desk for her signature.
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