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Bill filing for the 2023 Arkansas legislative session is officially underway and already four bills to provide tax relief to hard-working Arkansans have been filed–all by Representative David Ray (R-Maumelle).

• HB1012 would double the standard deduction allowed for the Arkansas state income tax, providing real relief to Arkansas workers starting in the next tax year.

• HB1016 would eliminate the arbitrary 3 percent cap on increases to the standard deduction and income tax tables. Additionally, the legislation would use a better measure of inflation to adjust these figures.

• HB1026 is a preemptive bill that would prohibit any overzealous local government from trying to impose any sort of additional income tax on its residents.

• Finally, HB1027 would require local advertising and promotion (A&P) taxes on food and lodging to be approved by the voters at regular general or primary elections. 

HB1027 is of particular interest: A&P taxes are currently the only local tax in the state of Arkansas that can be imposed on the people without their explicit consent. 

Unsurprisingly, more than four dozen cities in Arkansas have increasingly turned to these food taxes to ram through tax hikes.

The tax can be set as high as 3 percent, as determined by an unelected board. In some cases, the tax on lodging can be set as high as 4 percent.

(See our latest piece on the perils of A&P taxes here.)

No doubt, A&P taxes have played a significant role in Arkansas achieving the undesirable ranking of third highest combined sales tax burden in the country–higher than California, Illinois, and New York.

HB1027 will not only help guarantee voter consent of new taxes but also ensure that voters are given an opportunity to weigh-in during high-turnout, regular elections instead of specially-called elections that could be (and would be) otherwise scheduled at strategic times of low turnout.

Together, these four pieces of legislation would offer direct relief to struggling Arkansans and protect them from the combined effects of high taxes and inflation, the latter of which is costing Arkansans nearly a hundred dollars a month more on groceries alone.  These are just four early pieces of pro-Arkansas legislation filed for this session–there will surely be additional tax relief measures introduced to help keep more money in the pockets of hardworking Arkansans.

In particular, A&P tax reform is a component of our 2023 Roadmap to Opportunity and it’s very encouraging to see legislators stepping up to take on these out-of-control taxes that unfairly hit poor Arkansans and punish our neighbors for supporting small businesses.

As the 2023 legislative session draws nearer and nearer, keep an eye on additional strong tax reforms that will help make Arkansas more affordable and economically competitive with surrounding states.

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