House Revenue & Taxation Committee
Video
Transcript
Bills discussed (6)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
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SB364
· 4 mentions in chapter, transcript
Matched: “SB364”
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Pre-2017 bill | ||
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SB728
· 2 mentions in chapter, transcript
Matched: “SB728”
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Pre-2017 bill | ||
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HB1209
· 1 mention in transcript
Matched: “the same thing? I have House Bill 1209 that does the same thing,”
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Pre-2017 bill | ||
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HB2188
· 1 mention in chapter
Matched: “HB2188”
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Pre-2017 bill | ||
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SB316
· 1 mention in chapter
Matched: “SB316”
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Pre-2017 bill | ||
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SB596
· 1 mention in chapter
Matched: “SB596”
|
Pre-2017 bill |
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Representative Larry Cowling
Unverified
0:00
Someone that needs to testify on it. Do I hear a motion for that? So moved and all. Anyone object to that and all? All right, we're going to go to Senate Bill 364 and all. Mr. Burris, you're going to start this for
Speaker 2
0:19
Davey and all. Mr. Merger, you're recognized.
Speaker 4
0:33
Mr. Thank you, Mr. Chairman. I am running
Representative John Burris
Unverified
0:35
House bill, Senate bill, Senate bill 364 for Representative Carter. He is in another committee testifying on another piece of legislation. This is a bill by Senator Teague. It's a good bill that makes technical changes to the income tax laws by some code revisions required by the IRS. We do have a CPA here to testify, but the Chair's
permission, I'd like him to come up and explain the technicalities of the bill. That's perfectly fine.
You all want to come to the table
Speaker 8
1:09
where you can testify for this? If you will, let's make your
Speaker 10
1:22
name for the record now, please. Mr. Chairman, Tim Leathers with DFA. And with me is Jerry Birchfield, who is a CPA and has taken time off during his busy tax season. Not only does he work with us, with a group of CPAs and lawyers in the offseason, but he's here at his busy time,
and we really appreciate him being here to kind of explain what this does and means
to your constituents. Clarence Collins is here from our income tax section in case you have any technical questions. But to kind of make it short and sweet, we cannot and do not change our laws every time the federal laws change automatically. Some states do that where they just piggyback under their constitution. They can do that. Federal law changes good or bad, then they're stuck with it and they have to come and change it back.
We have the opposite situation. Our constitution will not allow us to do that. It's an unlawful delegation. So every two years we come in and we try and catch up on mostly minor changes to the federal tax code so that your constituents, we can use the electronic filing format and all the similar rules. The things that we have decided by policy, we try not to impact any of those. For instance, the Feds tax Social Security. We don't tax it at all.
They make a change in that. We're still not taxing that at all. So these are just minor technical rules that are out there, and Mr. Birchfield is here to explain those for you, and he can tell you what it means to your constituent. Mr. Birchfield, we want to
Representative Larry Cowling
Unverified
2:56
thank you for taking your time to come up here this morning. We're sorry for the delay, but you are recognized, and thank you again, sir.
Speaker 12
3:03
Thank you, sir. I appreciate the consideration as far as time goes, but I do realize I'm not the only one that's busy right now, too. I just have a few comments that I will read, which I think will go better, and then that's really all that I have to say.
On behalf of the Arkansas Society of CPAs, we appreciate being asked for input with regard to conforming Arkansas law with federal. It's been our experience over the years and that of the Tax Advisory Council that generally conformity is best. We have had situations in the past and which remain today, such as depreciation in which the budgetary impact is so great that we just can't conform Arkansas law to federal. But still, most things that we can, and certainly the ones in the technical corrections bill are pretty minor,
it's best to conform to the federal just due to having to keep double records, the professional fees that the taxpayers charged in order to keep double records, and the complexity to the person preparing his own return. Because generally the person preparing his own return knows the federal rules. There's been enough publicity for that that he knows the federal, but he doesn't know the state if they're different. And so that's certainly a reason to conform. It's been the practice of the council to look at every change provision in the federal code
and to make the determination as to whether to seek change in the legislature. and unless it's one of those major considerations such as depreciation, we believe it best to conform. I'd like to mention a particular problem with software vendors. Personally, we use one of the larger and more well-known vendors, but every year we have problems getting software corrected for Arkansas law. To most vendors, Arkansas is a small duck in a big pond, and so consequently they don't devote a lot of time to the state software,
And so generally it's best to have it conform as much as possible to the federal. Most of the changes currently being recommended in the technical corrections bill fall into one of two categories, changes which would seem advisable and have little or no budgetary impact. For instance, Section 280F, in which the feds eliminated the necessity of keeping a log of business versus personal use of cell phones. Well, the truth is that no one did that to start with. And so it certainly makes sense to eliminate or to conform to the federal in that definition.
Definitional changes such as Section 106 is to what qualifies as medical expenses. If the state provision is broader than the Fed, we're just asking for abuse since we basically rely upon the Fed for all this for deductions anyway. And then there are situations in which failure to conform would prove to be problematic. Section 125 having to do with a reduction after 2012 in the amount a taxpayer may contribute to a health-flexible spending account. If the state remains at the higher level, the taxpayer would be ill-advised to contribute more than the federal amount anyway
because he'd have a penalty on the federal if he contributed to the higher level. In Section 172, which allows annuitants who have not begun distributions to annuitize part of their contract, If the state did not conform, it would mean that the taxpayer would have to compute a different taxable amount for state purposes every year over the life of the contract, different than the federal. So, again, that would be an onerous provision. I would be remiss in failing to point out that there are both tax increases as well as tax decreases in some of the recommendations.
Since the Fed's extended tax cuts through 2012, we may very well be sitting here again in 2013 with a whole new set of federal changes. But again, the more closely we can bring ourselves to conform to federal law, the easier it will be for the typical taxpayer in preparing his own return, and the fewer fees other taxpayers will have to pay folks like myself to help them out. That's all I have. Thank you, sir.
Speaker 14
7:03
Thank you. Any questions from the committee? Mr. Kerr?
Representative Allen Kerr
Unverified
7:09
Thank you, Mr. Chairman. Okay, we're talking about Senate Bill 364, correct? Yes. Looking at the impact statement, the revenue impact for fiscal year 2012 is a $382,000 loss, fiscal year 2013 $523,000 gain. Can you kind of enlighten me on why we're going to have a loss
in 2012 and a gain in 2013? Mr. Chairman and Representative Kerr, what we
Speaker 10
7:40
have in these things are a lot of things
that taxpayers are going to do anyway, but we try and assign a number to them. But like Mr. Birchfield was telling you with a lot of these things, that if we don't make the change, the software is not going to get changed, so they're going to do – claim the federal anyway. So that's why we have those, and roughly it's so close it's just about revenue neutral in a lot of these areas because either with the gain or the loss these are things that they're going to be doing and we won't be able to catch them if we can't tie into their federal return but if we do the actual numbers on them
we try to figure out how much of that there is in the economy there would be a loss or a gain but the feds have already changed these and if people are going to be filing with them we're going to suffer that any rate so as long as it's pretty close either year then you know it's not significant enough for the the budget on those things because
Representative Larry Cowling
Unverified
8:40
they're gonna they're gonna do them anyway all right thank you mr. chairman any more other
questions mr. Patterson most not the proper time do I hear any other question but I see anyone in the
audience would like to speak against the bill or the bill mr.
Representative John Burris
Unverified
9:01
Burris you want to That's a good bill, a lot of effort's been put in by a lot of people, so I'd appreciate a good
Representative Larry Cowling
Unverified
9:13
vote. Mr. Pattern, what is your motion? Do pass. We have a motion. Do pass and all. If there's any other discussion, all in favor say aye. Aye. Any opposed? You passed your bill. Thank you, sir.
I'm going to take another one out of the order of, which one you've got,
Representative Larry Cowling
Unverified
9:50
728. Representative level, you can present your bill.
Representative Buddy Lovell
Unverified
9:53
Thank you, Mr. Chair. This is a bill for the Association of Arkansas Counties for the tax assessors. It's pretty simple. You can read on the second page. What it does is ensures that if somebody buys a piece of property that the revenue stamps are attached to the deed or conveyance to the new party, only the amount of stamps for the real property with the personal property separated.
Representative Larry Cowling
Unverified
10:27
I'll answer any questions. Is there any question from the committee? Mr. Love,
Representative Nate Bell
Unverified
10:40
you... Motion in the proper time. Mr. Bell? It seems this is pretty similar to something that we dealt with earlier. Are you familiar with another bill that kind of does
Representative Buddy Lovell
Unverified
10:52
the same thing? I have House Bill 1209 that does the same thing,
but it got amended so much that it had a target about as big as my back. So I'm going to pull that down when this passes. Okay, thank you. I
Speaker 47
11:07
was just thinking there was similar legislation out there and wanted to make
Representative Larry Cowling
Unverified
11:11
sure I was up to date on it. It obviously was. Is there any other questions from the committee? Anyone
Speaker 48
11:22
like to speak against the bill? For the bill, Reverend Briviano?
Representative Mark Biviano
Unverified
11:26
So you're telling me all the assessors are going to be in favor of this bill,
Representative Buddy Lovell
Unverified
11:31
there's no problem? That's correct, no problem.
Representative Larry Cowling
Unverified
11:39
Any other questions? If not, I don't see one want to speak against it or for it there was empty love Recommend do pass Mr. Chair motion has been made to do pass All those in favor All opposed no
Speaker 57
12:04
You pass your bill. Thank you, Mr. Chair and members of the committee I'm going to run 2188, and
Representative Larry Cowling
Unverified
12:23
I'm going to ask Mr. Burris if he'll step up here and run this while I go down there and run this bill.
Representative John Burris
Unverified
12:44
Thank you, Chairman Cowling, whenever you are at the end of the table and are situated. Before we go, if you saw me going around, I've got my Area Agency on Aging from Boone County here today, so I was glad you all were able to join
us and say hello for a little bit. I hope you enjoyed your trip. Thank you. I've been in the seat five seconds I'm already abusing it but Chairman Cowling
whenever you're at the end of the table situated you recognize explain your bill I believe you have an amendment that you need to to adopt first so I'll let you the amendments being distributed
Representative Larry Cowling
Unverified
13:37
I'll let you explain your amendment thank you mr. chair this is a tax bill that exempts the sales and use tax that we We have waited on running this until we get everything situated with the governor and the council. And this amendment just clarifies some of the provisions in it. It offsets the loss, and I'd ask for a favorable vote on the amendment, please.
Representative John Burris
Unverified
13:59
Okay, members, you've heard an explanation of the amendment. You have it in front of
you to review. Are there any questions on the amendment? Okay, Representative Kerr. I have a motion of due
pass on the amendment. Members, there's a motion to do pass. Any discussion? All in favor say aye. Aye. Any opposed? The amendment passes. Representative Cowling, Vice Chairman Cowling, you're
Speaker 14
14:25
now recognized to explain your bill, please. Thank you, Mr. Chair. Folks, this is a bill
Representative Larry Cowling
Unverified
14:31
that counter companions with the Speaker's Highway Tax Bill,
And this is a revenue and all for the Class 6, 7 trucks to be exempt from their sales tax. There's 33 other states around here that it does this. There is going to be revenue neutral because they're going to, if you will look on the second page of this, it shows to be a revenue neutral deal. And trucking industry is a big industry in the state of Arkansas.
that And like I said, it was just a companion bill to the speaker's bill, so I'll be glad to answer any questions
or I've got some help that can if well can't so thank
Representative John Burris
Unverified
15:17
you All right. Thank you. Vice Chairman Cowling
members. Are there any questions? Mr.. Representative Cowling Okay, if not a representative Viviano
Representative Mark Biviano
Unverified
15:28
Yeah, could you further explain the revenue neutral and on your impact statement, it's It's we're going to decrease sales tax $4 million.
Representative John Burris
Unverified
15:41
here and explain this for a million dollars? Yes, Mr. Leathers, if you'd sit at the end
Speaker 10
15:57
of the table and help answer the question. Mr. Chairman, Tim Leathers from DFA. This is revenue neutral for general revenue. There's a funds transfer every year that would offset this from the tax that would take place
and be enacted. So it's revenue neutral as to general revenue, taking part of that money that would be raised elsewhere. All right. But
Representative Mark Biviano
Unverified
16:18
it's still costing the state $4 million. In
Speaker 10
16:22
general revenue, it costs nothing, but it will take money away from any increase in the other taxes that are passed out
Representative John Burris
Unverified
16:33
there. Okay. Okay. I would just clarify that the implementation of this is tied to the passage of the five-cent diesel tax.
Representative Larry Cowling
Unverified
16:39
Is that correct? Yes, it is. Okay. And it says in the deal it's going to take the money from the highway department and transfer it from the highway department over to general revenue.
So that's where it's offsetting itself at. Okay. Thank
Representative Mark Biviano
Unverified
17:00
you. Representative Jean. Just to clarify, this is going to come from the motor fuel tax that you transferred
Speaker 10
17:09
back over to General, correct? It will come from that fund which includes motor fuel tax along with some other highway and special use taxes, but it comes from that fund that those include, they're the major part of
Representative John Burris
Unverified
17:28
that fund. Okay. Thank you. Thank you,
Representative Stephen Meeks
Unverified
17:31
Representative Jean. Representative Meeks. Quick question. We're going to exempt the sales tax on the, well, it's class six or seven trucks. What is the current tax that they're paying now?
Speaker 10
17:44
The tax currently is capped at a little over $9,150, so you don't
pay tax on that amount. You only pay tax on the amount over that. And what this does is it goes ahead and exempts the rest of
Representative John Burris
Unverified
18:02
that. All right. Thank you. Thank you, Representative Meeks. Representative Wenderman. Thank
Representative Homer Lenderman
Unverified
18:10
you, Mr. Chairman. On the second page, it says that registered as Class 5 through 8,
we are looking at exempting Class 6 and 7 and yet taxing Class 5 and 8. What are the different classes there, and why are we just exempting some of them? Mr. Chairman, Tom
Speaker 10
18:28
Atchley in Sales Tax has been working on this and keeping up with the details. If we could let him respond
Speaker 81
18:37
to that, please. On the classes on heavy trucks, it's actually the choice of the owner of the truck as to what class to register them in. Class 7 is usually the largest class, and that's for a truck that's going to haul like 80,000 pounds.
But for that same truck, you can license it for a lower class if you're not going to haul that much weight. And so really it comes down to an option of the truck owner as to which class to register that truck in. And so with this estimate that you've seen, we're taking into consideration those trucks that are large but are registering right underneath the
Speaker 82
19:11
limit now, and they'll be entitled to the exemption. Okay, thank you.
Representative John Burris
Unverified
19:20
thank you representative linderman members any other questions
okay representative lindsey thank you mr. chairman what's the position of
Speaker 29
19:26
the highway department on this well i would i would say that the
Representative Larry Cowling
Unverified
19:32
highway department is going to do it if they're going to get a tax to fix highways and everything so i don't think they'd have any opposition to it Not much so
Representative John Burris
Unverified
19:45
ever. Thank you, Representative Gallagher. Thank you, Representative Lindsay. Representative Love.
Representative Fredrick J. Love
Unverified
19:51
Thank you, Mr. Chair. I was just listening to you.
Who was the gentleman because he didn't
introduce himself? Tom Ashley with DF&A. Mr. Ashley. Now, you say it was up to the discretion of the owner of the truck where they classified as a 5, 6,
Speaker 81
20:12
7, or 8? Is that what you said? Yes, sir. On those large trucks, they
Representative Fredrick J. Love
Unverified
20:17
can license on President Land of the lower class, yes. Okay, so now this will affect 6 and 7. So my question is, do you think in your estimate that people will opt out of being in 6 and 7
to go to 5 or 8 if there is no tax related to it? No. I'm just trying to. No, sir, it's our
Speaker 81
20:43
belief that those that are not registering as 6 and 7s, they may be registering, as an example, as a 5, they will elect to register as a 6 in order to get the full exemption on their
Representative John Burris
Unverified
20:57
purchase. Okay. All right. Thank you, Representative Love. Seeing no other questions from members, Do you have a question, Representative Gene?
Speaker 90
21:04
Okay. You've got my curiosity up. Under the current law, we are
Speaker 73
21:15
now taking money from the highway fund through usage and also motor fuel, and we're going to add an additional $4 million to cover this. What are we taking now to bring back into general revenue? Well, from the fuel now,
Speaker 10
21:35
all the fuel tax is special revenue for highways, so there's none of that diesel or gasoline tax, those gallonage taxes that would go to general revenue.
Like all funds out there, there's the 3 percent off the top for Constitutional Fiscal Agency, but all of that money on fuel goes to the highway fund, which goes to Highway Department as well as
Speaker 90
22:02
the city's counties. But on the first $9,150, that's the current
Speaker 10
22:06
law right now? Well, the exemption is out of sales tax, which is general and the education money. It's not a fuel tax exemption. It is a general revenue exemption.
Representative Uvalde Lindsey
Unverified
22:19
Okay. Thank you. Thank you, Representative Jean. Representative Lindsey. I'm sorry, Representative Jean's comment just triggered another one. You said State Central Services and Constitutional Officers Fund is off the top from the Highway Department. Is the transfer come out of those funds, or is it transfer comes special revenue motor fuel tax? MR. The transfer
Speaker 10
22:44
will be special revenue motor fuel tax. There will be no impact on central services funds by doing this.
Representative John Burris
Unverified
22:50
MR. Okay. Thank you, Mr. Loethers. MR. Thank you, Representative Lindsey.
Members, any other questions? If not, then anybody in the audience here to speak for or against the bill? We have Mr. Leathers and Mr. Atchley. Do you have any additional comments you'd like to make? Okay. Seeing no other
comments or questions of members, what is the pleasure of the committee? Representative Kerr? Do pass as amended. There is a motion do pass as amended.
Any discussion on the motion? All in favor
say aye. Aye. Any opposed? Congratulations, Mr. Cowling. You have passed your bill. I thought about, I almost looked up a short
joke just on the off chance I need to kill 10 seconds today, and I didn't this morning, and now I regret it. So as Mr. Cowling walks back up to the front, I'll turn the chair back over to him. I think we do have a couple more small bills to run. Thank you.
Representative Larry Cowling
Unverified
23:56
I think we're just kind of jumping around and all that. So now
I think we're going to, Mr. Burris has got one for 596 Senate Bill.
Speaker 4
24:44
Mr. Burris, you recognize, present, Senate Bill 596. Thank you, Mr. Chairman.
Representative John Burris
Unverified
24:48
I'm running this bill on behalf of Senator Jonathan Dismang. It's a pretty simple bill.
you have it in your packet, it's towards the back. Simply, all it really does is if a owner shows up to pay
redeem on a delinquent property within 60 days of when the sale is supposed to occur, it just simply requires them to pay that with a certified payment method,
cashier's check, something like that, rather than just writing a check. there's been a problem with go through this whole process of advertising the sale somebody shows up within 60 days writes a check it ends up being hot the sales is cancelled then the funds don't come through have to go through the whole process again so again all it simply says is if the sales and the schedule date of the sales within 60 days just has to be a certifying type of payment to eliminate that problem be happy to answer any questions
Representative Larry Cowling
Unverified
25:51
Do I, Mr. Kerr, you got a question? I mean, Mr. Meeks, I'm sorry. Anyone else have a question? See no questions from the committee.
Is anyone to speak for or against the bill? If not, would you like to close for your bill? I'm closed, Mr. Chairman. Do I hear Mr. Meeks? Motion to pass. Motion is due pass. All in favor or do pass, say aye.
Aye. Any opposed? Thank you, sir. We are going to run
Senate Bill 316. Chair McCarty, you can present your bill.
Representative Davy Carter
Unverified
26:58
Thank you, Mr. Chair. Senate Bill 316 deals with setting off debt on income tax returns. Basically, the bill amends the definition of debt from an amount that's due and payable for more than one year to an amount delinquent for more than six months. But, you know, the upshot is, you know, it's set off on debt owed to the state, reducing that down to six months. I don't know that there's any opposition to the bill.
Representative Larry Cowling
Unverified
27:32
Anyone like to ask a question? Representative Kerr?
Motion at the proper time, Mr. Chairman. Anyone else would like to ask
Representative Stephen Meeks
Unverified
27:44
a question? Representative Meese? Thank you, Mr. Chair. Representative Kerr, I don't know if you know the answer to this. But do you know what
Speaker 29
27:51
the motivation for going from one year to six months or the benefits that would be incurred by doing so? I have
Representative Davy Carter
Unverified
27:56
not done the math. In principle, I certainly agreed with Senator Keyes, told him I'd come down to try to help him run the bill.
I think that probably it's just a matter of timing, and this is delinquent for more than six months. So this isn't just, you know, it has to be delinquent plus that. So it's just a better opportunity to collect
Speaker 14
28:19
debt that's owed. Okay. Mr. Linderman? Any other questions from the
Representative Larry Cowling
Unverified
28:28
committee? Representative Kerr, did you have a question?
I had a motion, Mr. Chairman. A motion to do pass. Let me hang on just a second. Is there anyone that wants to speak against the bill or for the bill? If not, no, then Representative Kerr, I'll take your motion. I have a do-passed motion. All those in favor say aye.
Aye. Any opposed? Thank you, Chairman. While the Chairman's coming up here, I've got an announcement
to make. But after today, it will be announced, and we're going to go in at 1 o'clock today.
At about 2 or 2.30 and all, we're going to go into recess. And we don't know yet for sure, but we may come back down here for a meeting. So we need to keep that on your mind. We will adjourn the meeting today when we get through here, and then if we come back, then it will be a new meeting. So that's the reason we can't have two meetings going on at the same time. But do I have any objections? Does anyone want to object to that, that we're going to adjourn, go to the house and have a meeting there, and then we're not sure we'll have a meeting,
but we've got to be set up where we can have a meeting if we need to. so it's just if no one objection do I have a motion to that motion to accept that then the motion is all in favor say aye I don't know that we've got anything else does anyone else have anything we need to run today do we need to go down through the list
Agenda
Call to Order
SB364
SB728
HB2188
SB596
SB316
Adjournment
Documents
No documents posted.
Speakers
Representative Larry Cowling
Unverified
Speaker 2
Speaker 4
Representative John Burris
Unverified
Speaker 8
Speaker 10
Speaker 12
Speaker 14
Representative Allen Kerr
Unverified
Speaker 34
Representative Buddy Lovell
Unverified
Representative Nate Bell
Unverified
Speaker 47
Speaker 48
Representative Mark Biviano
Unverified
Speaker 57
Speaker 64
Representative Stephen Meeks
Unverified
Representative Homer Lenderman
Unverified
Speaker 81
Speaker 82
Speaker 29
Representative Fredrick J. Love
Unverified
Speaker 90
Speaker 73
Representative Uvalde Lindsey
Unverified
Representative Davy Carter
Unverified