Revenue & Tax - Senate

The mother passed now I think I'd go and explain it so there's you know a lot of discussion about the mobile workforce that's how long someone works inside the state when we should start collecting you know income tax that sort of thing I understand there's a lot of unknowns in regards to that and so this amendment strikes all of the language that related to the mobile workforce out of the bill dolling it then is left is what is meant to practice the state of Arkansas pretty much until two thousand and nineteen or at least I think it's two thousand nineteen lease the understanding before there was a legal guidance for issuance from the Department finance administration so the bill now that is just left to say is if you work in Alabama for instance and you pay income taxes in Alabama if you work in New York if income taxes in New York regardless of where the company is located so as of for instance if there's an Arkansas based corporation as employees out of the state the FAA had issued a. Legal opinion what we call a legal opinion that said that they owed also owed income state income taxes state of Arkansas this clarifies that gets us back to what has been commonly the practice understanding of employees across this country in relation to the state of Arkansas I think DFA can come speak to it it's an unknown revenue impact will be minimal again because it's something that's not actually been practice very much and. They'll testify to that. Senator Teague you have a motion. I have a question. The US. Impact statements is up to twenty two million The Amendment tracks out that that that was really due to and it was unknown the mobile workforce component that is stricken from the bill that was section three in the bill in its stricken in its entirety how do we we normally pass one without the income statement. And if that changes in the my commitment no but he's of no use if they if they if they will have one by the time makes it to the house and when they do and if this is my thought that we had and gross on the floor and I walked in today and realized that it wasn't so again out of this so that that's my problem but we'll get a green sheet on this if it comes back differently than anything or they catch something and then we'll have that discussion House my commitment is that it's not minimal that will pull it down and what we considered the property thank you senator Johnson your question on the amendment. Yes thank you Mr chairman of the center we when you brought this bill up before I ask you about the workers for these highway contractors coming from out of state is this change what is your treatment now that the bill is amended they are supposed to pay taxes for every day that they work for the state of Arkansas that's that's the you know the way it is currently set up the bill originally was trying to set a thirty day limit before we started collecting intact income taxes in that so that's a much more difficult thing to swallow in in probably to understand so wanted to get back to the simplicity of you know what we thought you know what it's always been understood to be the case until the the guidance from the effect so if the employer is the one that's supposed to keep up with where that particular worker is working and there's no thirty day. Shall we say waiting period that be correct okay thank you Sir thank you Mr. House. The. Yeah. He. So after amended this. Amy. Why do we need to do this I mean give us the reason now that it's been amended out the what was so this is to provide I guess what we would call Legislative intent DFA issued guidance in late of two thousand nineteen pretty much saying that if the corporations based in Arkansas and I had employees working of the state there was income tax there was no wash for credit there are some issues with that in my opinion this is just for us to provide clarification is needed it DFA that now we're going to go in and do what we've always done the state of Arkansas at least what was understood to be the case your you pay income taxes on the place that you reside state that you reside. Thank you Mr. Yes thank thank you Mister chair members of the committee so we reviewed a draft version of the amendment we discussed that trapped with Senator Dismang when we did our initial revenue impact for this bill there was an entire section three of the bill that provided the thirty day period for the temporary workers to come to the state where they would not have to pay individual income tax provided that their stay was limited in duration and also that they were a resident of a state that did not have income tax or that their state had a similar provision in their law we did currently look at our twenty nineteen returns we had two point one billion dollars and wage income reported by and nonresidents we did have an undetermined revenue impact section three regarding the bill has been by this amendment has been taken out so in reviewing the draft amendment and the the changes that are encompassed in the bill we believe that the revenue impact is still going to be undetermined but it's will be a minimal revenue impact and that's what our fiscal impact statement for the amendment will reflect. Are there other questions. Senator what do you know when a bill originally cover calculated the impact statement how much was just a thirty day period the did you have that broke down we we did not we we had a number of individuals I believe it was in the sixty to seventy thousand range that were reporting this nonresident wage income. What the mixture of those people that are the construction workers or or the energy workers or possibly that are entertainers for coming here from a very short duration we just did not have that information that was available within the returns I just I don't really see others will be much of an impact at all with with that take it now we we agree we agree that it would be it would be if we would be a bill to put a dollar figure on it but it would be minimal with the changes that remain in the bill and just also to your point Senator if we don't take action and we allow this kind of be the Norman and DFA's or obligation at that point because their guidance to go seek out and collect that revenue at some point we will have a revenue impact in the and at that point that's a much more difficult decision for this committee to make because again what it would be a part of our forecast and and that sort of thing. Thank you will. Senate. Chairman just observation I am more. I like the idea of seeking out collecting out of state revenue better than I do US taxing our people if there's somebody in state we ought to be thinking about getting the money because as the that's not our people. It and I appreciate that part of this is consistency with what other states do and how they handle their income tax structure there's only six states I think we would have been the seventh is that right that would have applied you know the standard the way that you know that the DFA issued in the guidance and so that that's part of it to to fairness issue I think this is the prevents double taxation which regardless of where those folks live I don't think we wanted we wanted to. Well. Some of those. Or are there other questions. What's with the body motion do pass as amended. I have a motion do pass as amended by Senator Dismang second by Senator Johnson's discussion on the motion. Seeing none all in favor say aye. Opposed no. Duly noted by Senator Teague is no motion passes. Okay Senator Rapert you expressed that you need to do the another meeting soon so. For the purposes of speed Mr chairman I have sure ward to join me he drove down here from Craighead County. I'm sorry Mr chairman if it pleases you sheriff Boyd drove down from Craighead County just go sit with me or. You're here to present SP three oh four now yes Sir yes Sir and members I appreciate you for the opportunity it comments on the calendar we had sure for that drove down and have a lot of conversations with members in the committee and obviously you know my my position and I know all of us are doing what we can to support law enforcement I understand the reality of the situation being that your commitments have been made and we're at a point where we're trying to hold off until this fall to discuss priorities for tax cuts for the state larger tax cuts and so obviously we try to do what we can I'd prepared an amendment which I'm not gonna be running the amendment but we wanted to at least allow voice here for the law enforcement officers sheriff ward is come down and I'd like to allow him if you will to make brief comments about the state law enforcement in terms of their salary situation and he understands well that we plan to continue the conversation moving forward and see what we're able to do is a state but obviously we have a very large tax cut proposal that we will be consideration we understand we may or may not get anything individually for law enforcement but we're certainly going to do what we can to make sure that everyone is helped as best we can in Arkansas so with that I yield sure forward. Sure. Senator Johnson you have a question for represent over centered records. Go ahead thank you Mr chairman. Senator I appreciate the effort you made on this and I know that our share of our county's supportive and I told him I would supported I just I would hope that you would consider and would you consider looking at this even if it's in the next regular session of somewhat to two. Not just an average of will it opens it up to everything but the these are people that put their life on the line and I'm not saying other people aren't great service to our public but these are the people that put their life on the line every day so would you consider perhaps the future maybe slightly scaled back situation of a similar to yours yes senator and I appreciate that and and to to also extend and say even folks that have not been able to to say that support this right now they obviously support the concept of helping law enforcement absolutely but we have competing interests that are happening in the state so we get that is a reality of managing a budget we can't do everything we ask for but definitely a center my I'm always open whenever the opportunity arises to address an issue we want to do that and and I appreciate your support it was one of the back to blue items but you know we're pretty much probably knocking in about ninety percent of those items and have an agenda like that that's a win and so I'll save my last comments or likes your bill say were going to go to another committee chair for ground beef co sponsored thank you senator thank you your from you would and information for the record and tells yes Sir Marty board cricket county sheriff first thank you all for allow me to be your date to speak I just want to share a little bit about the state law enforcement that we're seeing today I know you've heard from members of law enforcement throughout the session and every day that you're in your home counties but you know I I see law enforcement across the situation right now five years ago sign in create a county where I work we had opening for position I had fifty to sixty applicants to pick for today I've had eight applicant or I'm sorry seven eight open positions for the last six months that I cannot fail and that's where the state of law enforcement and that's with everybody that I speak with a law enforcement. As what we're seeing today we know the national media what has happened law enforcement and we just to get to the point where no one is willing to do this job anymore. so any kind of. Retention or recruitment tool that we can have it's going to better our state right now I was honored to serve on the governor's advance to state law enforcement task force this is a conversation took place in every task force meeting that we saw were Arkansas forty ninth and pay an average for law enforcement that's not a good number for Arkansas to be and if we have it we're gonna back demand law enforcement a professional and held accountable to their duties we must figure out a way to pay that to to have tracked that individual and to keep that individual and those departments and make sure that we give the best service the best so public safety to our citizens that we are that we can possibly do and so again I wanna thank the members for being here allow me to speak and anything that we can do to set a priority what we can look at as far as you know that recruitment retention side of law enforcement date and unfortunately the pay is what recruits and what makes people stay in those positions so we desperately need help and I appreciate you thank you. Who are the question sure. Senate thank you Sir. Senator Rapert sheriff I appreciate you being here and my intentions was chairman and having discussed it with all the members is I'd like to pull the bill down I'll be sending it to interim study which allows us all to continue to make it a discussion going forward and it just I guess editorial comment with all this going on in the country we do have to figure out a way and I would actually call on all of the local and city governments out there county and city governments we have to figure out to make sure that also that they are helping to make sure that the pay is there for these individuals as well my theory is after what we've seen in in the last several months and our country that their spouses sitting down with law enforcement officers and absolutely love this what they're doing they're called to it but they're having to make a decision can we stay in this one in some cases there even facing the penalty of of prison and Chargers himself just for trying to do their job and so I appreciate everybody discussing this and making an effort and I know many of us going personally work on force I think the committee for at least let us have a a last word in and we'll think about it as we move forward thank you Sir all right in Mr chairman as you know I've got to leave I think you got one bill that shouldn't take very long that maybe we can handle that Senator Hickey talk to you about sure thank you. The house bill not well one thing O. okay. Yeah. First of all we got suspend roots Radics right. Do I have a motion to suspend the rules to your house bill nineteen twelve I do I'm certificate make motion Senator Rapert second second any discussion on the motion saying none all in favor say aye opposed no motion carries okay Senator representative Payton members we're going here House bill nineteen twelve edition your pack. Probably it volunteer fact. I got. Okay. Senator Rapert you can present the bill I'd like if it's all right I'd be happy for representative Payton I know that we've all worked very hard I think we all know exactly where the still stands and I'd like to defer representative Payton first words on it at this point representative Payton welcome and if you would present the bill please thank you Mr thank you Senator Rapert so this bill is a a different idea on how to bring some relief on the chief for used car sales tax and so currently we have a. four thousand dollar exemption any vehicle under four thousand dollars is exempt from sales tax state sales tax this bill takes the vehicles between four thousand and ten thousand dollars and introduces a reduced rate of three and a half percent instead of six and a half percent. Which is what the state taxes currently so those vehicles between four thousand ten thousand. Would be taxed at the reduced rate. I wanna see if you say it's been very back. Great I'm sorry well that was pretty much all of it I mean I appreciate the the opportunity to be able to present this bill I appreciate the efforts of all the committee members that work with us on this and I ask for devote. Or other questions. Senator Johnson. Thank you Mr chairman of. Represent Payton thank you for the work you've done on this issue. I absolutely agree with you that the best way to help low income people is to have a man reliable transportation because That is not a luxury in Arkansas that's a necessity just like having the lights on and food in your belly so thank you for everything you've done on that I would like to ask if you would consider looking at this in the future where maybe when our fiscal situation is a little looser and pandemics are over in our things are I hate to say normal because I don't know what normal is going to be in the future but things are better that you would would consider even further relief for people at this level new car would you consider something like that. Thank you for the for the question so I think the members is committee we're here I presented to another bill the other day that was a step further than this and and and. We all reached a compromise I'm not satisfied with this bill but it's the best I guess we can do right now so yes I'm committed to. Continuing forward me on this to try to To relieve the tax burden altogether on those vehicles that are so near the end of life we've already taxed on three or four times or more and they are a necessity the hardworking salt of the earth our Kansans that they need to get back and forth to work but also to the employer that needs a dependable employee because you know if they don't have dependable transportation very few people in Arkansas live within walking distance of their job. And the. Full in four five hundred dollars for the sales tax out on these vehicles encumber as their down payment and their ability to meet our other obligations for the month or the first couple months so I mean I'll try to keep it short of of made that presentation but but I I do intend to be back asking for more down the road. And I will be there to help be represented by thank you Sir thank you Mr chairman Mr chairman we appreciate the opportunity come and thank you for your leadership and committee on lease getting to compromise Sir thank you Senator Hickey your question and maybe just if in a. This is three and a half is that correct. The time's up. Okay. A line fourteen I guess I'm just reading this wrong what is the two point eight seven five. All Page three line fourteen. Yes. Are you selected. Five five glasses on here take a look at it. Can you repeat the page number nine number. I'm sorry I should have been reading Page three lines fourteen. This is not the right bill. Thanks if a girl stated in our bill now can you look at it Sir. Yes I'm sorry Senator Rapert page and I need a second order read because probably it's on page three A. I. see here fourteen but I think that's on impact statement. This is. I have a forty FNA to the adoption I'll always drive. You would come please. Yeah. Stolid take here stands. Six start fourteen. Sure. Mr chairman and it also they clarify this in writing only impact statement the weather coming up the numbers for the three and a half percent impact. It's on page two of the green impact statement I was just looking. Is it is it picked up in the bill as I just automatic. Mr. And see if you look members on page three of the bill. Lines fifteen through line nineteen. And you'll see I'm sorry I'm on the line fourteen you'll see the two point eight seven five percent but you also see in us subsection B. the tax levied in this section shall be in addition to any gross receipts or gross proceeds tax levied in the Arkansas constitution which is the half cent and then the conservation the one eight cent plus the city and county sales taxes. Right that's that's good enough we just what listed specifically without that works great thank you thank you and I'd like to apologize to the Committee I could probably quote scripture verse on the other bill but not this one. Late in the session. That's understood at Central. Mister chairman I think that we we've got that last question held here I think it's all in order and you know again I applaud for any improvement that we get any relief so I'm glad we're at this point least appreciate a good vote. If. And I make a motion do pass go. And second by Senator Johnson junior discussion on the motion. Senator Johnson for people who may be watching us on their computers at home and wondering what we're doing I just wanna clarify that. When the voters put a half cent sales tax in the constitution or put a one eighth cent sales tax in the constitution as they have done then if we're going to tax anything at all we can't touch that that's right and so what we're doing is we're sitting where the net right on that lower end of the scale of used cars will be taxed at a net of three and a half percent and so we have to set that other rate at two point eight seven five to make that happen so I only say that if you are wondering why we did more well you folks there when you voted for that you tire hands of being able to eliminate that part I'm not saying it's right or wrong but when everybody is watching to understand that fact so that's why the rate is what it is and and I believe we were comfortable this compromise but in the future I don't think it's good policy to chisel and stone any tax rate and because we like might wanna bring them down some stuff thank you Mr duly noted. Seeing no other discussion all in favor say aye aye opposed no congratulations center rank you Mr thank you Committee what I'll be out of line to ask for a vote on house bill eleven sixty that was passed unanimously in the house. I was gonna ask thank you. Last. Okay. Senator Teague you prefer to present five seventy five. And for the House. It was a top of mind. Senator Teague. You're recognized thank you Sir thank you members I've got this fine bill today the the. creates a non refundable income tax credit to fund the cleanup and right mediation and binding sites dealing with the. Tire waste Sets up two million dollars for it has a two million dollar impact according to yesterday wouldn't have an impact I don't think the first year because you wouldn't get the credit tell you had it cleaned up but that's not the way I think they wrote it anyway I thank you any questions Preciado good vote and all that stuff. Senator Johnson. Senator Teague. Is this a mess created by people that we're now give them a tax credit to clean it up. In some cases maybe but in a lot of cases where people were dumping tires for you for years and they still haven't been cleaned up of my landfill in and now mine and center Decatur each part of the world has about forty thousand art forty thousand tires stacked there that need to be cleaned up they can keep up with what they have but they got behind at some point but so in that case may be but there are other places where they're just waste are not sent they need cleaning up to. Well I just I've I'm glad to help those that are trying to do right now I've just got a insurmountable problem on our hands on the other end I don't want to give a tax credit to people that weren't following the law in the first place and I don't see a way to if if there's a way to separate that then I would you know be okay with with health possible the Department could do that through Choose a who they could that be implemented by rule by the department could do anyway what do they get to decide who gets L. would you be willing to work with me on a rule such as that no because my landfill need to. Because what my life will be to help they got forty thousand extra tire I'm not I'm not I'm we we get include the good actors are trying or just have an okay overwhelmed with yeah I I love to talk to you about it okay thank you senator thank you. Are there other questions. Motion. Does anyone or else S.. Mr during any questions we do have a fiscal impact two million dollars Mr might explain Mr gain he's wrong on this but he didn't really agree. Nasrec. I move do pass. I have a motion do pass. We have a motion to passes or second. I don't hear one thank you. Thank you for. Senate. Senator Clark. Workstation I've record in your ear president Senate bill six ninety five is that correct that is correct state Senator Alan Clark representing Senate district thirteen. R. six ninety five is a simple bill does two things. one it says that if the FAA. Of. false taxes for someone or comes up with a different higher tax than what the taxpayer came up with that they have to show them their calculations on how they came up with that number and which you would think. Would be done anyway and the second. Part of it is for any assessment of over five thousand dollars. That it will be sent A Russian mail. The for me personally if. if city. Of center Johnson owe me money. I would have to if it was a dollar would have to send it registered mail of for a couple reasons one is that. There cannot be an assumption that the mail always gets there because the mail doesn't always get there there can't be an assumption even if the mail gets there the center Johnson saw it he could have a high volume of mail of and never see it. And. Third it can't be assumed the court would never assume that I actually mailed it and so there has to be a proof of service or of refusal in order for me to get into a court room or even the following and the we have. Numerous proportion taxpayers. That they received assessments been told later. that they had these but it was too late to appeal that time had run and they had no idea that they that they had a problem I'll be happy to take any questions. Are there questions. You. Mr would you come up we have a question for you please. And I'm probably a little bit fuzzy but I I think we did something like this in a prior session where we required the disclosure of the calculations. and I may be wrong but I think maybe. Senator Johnson carried that at the time of the other one your memories yes senator member meet your memories correct was ACT eight eighty one of the two thousand seventeen session okay. In the end so how would what the requirement in this bill differ from that I think the postage is that the main different but also thought there was requirements on certification. Maso couple couple things and the way that the law currently reads is that if the taxpayer has any questions about the facts and underlying circumstances or the reasons for the assessment we are required within our notice of proposed assessment to provide the contact information so that those documents could be furnished with this bill does is it it has a requirement that we furnish everything within that assessment the the supporting schedules audit comments calculations of that of that order would have to be furnished with the notice of proposed assessment as opposed if the taxpayer requested it you be furnished on request. Okay. So right now we just we have to make a bill what is the requirement timeline that so that has to be provided to the taxpayer from DFA according to the two thousand seventeen act there is not a specific timeline within the current statute for DFA to furnish the information of course we want to furnish that information as quickly as possible the taxpayer has the right to file an administrative protests were also to file suit in circuit court if typically what these documents are are already in the possession of the taxpayer we validate their books or records the already have them we reviewed them and that we came up with an assessment or refund claim denial so if there are other further documents that we relied upon that were not in the taxpayer's position we would be forwarding them and as quickly as possible but there's not a specific date in the law that we have to provide okay thank you in in the Sir Clark any if you want to kind of go you may have already known that may have already been aware of that will and so there is a case going on right now. Where are they came up with a number that was double what CPA came up with of and were asked to provide documentation how did you come up with this number they refused then they came back and actually came up with an even higher number and refuse to show documentation for either one of those numbers and said quote sue us of which is what's going on right now. I understand Hey in so like in the situation he just described as a reason that DFA wouldn't provide documentation you know under the act eight eighty one or whatever it was law and so that may be discussion that that taxpayer needs to have with the if a. To make sure that they're following the law I mean it's not that what I'm what I'm trying to say is I understand what you're saying Senator I think we really did try to fix this because I recognized to be a problem also you get assessment amounts as five hundred thousand dollars you have no idea what it ties back to and required a basic calculation ability to call a asking so. You get is there is there any reason the information would be disclosed that taxpayer no there's there's no reason that the information should not be disclosed. Senator Johnson thank you Mr chairman of. Miscarrying you heard Senate Clark's analogy followed him a dollar he. Have a right to to know this and we have certified mail or other documentation of of the facts of if if he chooses to sue me then we get our lawyers and we have discovery and we'd be able to the other side would have to provide all the documentation of that and if what I'm hearing from the example that he used is that the the FNA is not necessarily providing that level of information to the taxpayer that he he appears to be seeking in this bill is that accurate well I certainly want to make clear that DFA is not able to discuss an ongoing tax matter they're not asking about specifics only in general of course but yes I agree with senator Dismang question are agree with your question if there are documents that are in the possession of DFA pertaining to an audit they should they should be probably provided to the taxpayer. Okay upon quest I'm just I'm concerned when when that that seems to come up that is Sir Clark says situation there's a crack controversies I will sue us which is basically saying the taxpayer you know go hire a lawyer and spend money our lawyers are all paid for salaries in up front and you're gonna have to pay one by the hour I'm just that's that's a little concerning me and I'm I'm just wanting to see if there's some way to avoid litigation for all possible by everybody laying their cards on the table I guess that's the purpose of your bill is it not Sir Clark it is I I cannot imagine a time that if I told someone they owe me money that I will would not document exactly how it is in fact had that happen numerous times on the invoices showing what was delivered but if it's a matter calculation and our calculations are vastly different based on the tax code the they've already turned in their calculations why wouldn't the state showed their calculations as to how they came to those numbers. Mr curious follow up on that I just wanna make sure that that what I see if you're telling me they're really doing this to the extent that we can try to but there's some some time tables and and notices that are are true notice when you get a certified letter and you sign forth in that tolls of time and that's where this would go where if you drop one in first class mail then lord knows what might happen I mean I got a Christmas card back I sent someone in Virginia before Christmas I got it back from postal service in the dress was correct I got it back about a week ago so I'm I'm not this is an important matter that people could be charged with criminality it's it just seems so important to me that that we need to define those timetables and I have I'm just wanna make sure you all are okay with clarifying that was certainly if if if the General Assembly wanted to put a time line in the law for the current law that says that upon request the documents would be received within a spus specified number of time we would have no problem with that I think the issue that we see with this bill is that. there would be an obligation to furnish the entirety of the audit file when the taxpayer may not need that information because that's already in the taxpayer's possession currently if there are any documents that are within the audit file that are the taxpayer's documents whether it's financial information proprietary information confidential information we would have to print off all of that information and include it with the proposed assessment in every circumstance that we send out a notice of proposed assessment miscarry I I'm a I agree with you that the cat taxpayers should have that in their possession but in the instance if the taxpayer's records and the records of the FNA is working with are the same the only way that a taxpayer could could see that you know you guys have you got these numbers down wrong and I've got it here to show you the only way to know that would be if you provide Hey here's the numbers were working with Mister taxpayer and he says I can prove to you and get a statement from my bank that no that wasn't my income that month and and I I'm I'm not I I'm not based I'm not questioning good faith of either side I'm just saying the only way that you could could to verify those figures is for us if I'm the taxpayer for me to see what you guys numbers are and you look at my numbers and if there's any discrepancy then you got to go back to figure out why so I'm just I'm not against this bill it to me it's just a of both sides just like in a lawsuit with discovery both sides have to lay their cards on the table so you can see what it is and and I hope in many cases avoiding litigation well I and I agree with wholeheartedly what we do provide in terms of the calculations it's it's called the summary of findings it's a document that is is printed and provided to the taxpayer that has the calculations for each in. Jewel period whether it's a month period or annual period that's already a part of what the taxpayer receives. But you don't want to provide all of that information is that correct there's some part of that not just your your summary or whatever it is but but the entire. documentation that led to that that summary is that what you all are trying to no no we we the the way the law works right now is if the taxpayer would like any information that's that they in need for purposes of pursuing their their protest for going to court the law provides that the taxpayer shall be given the caught the contact information to produce the documents what we see a problem with this is for the over two hundred thousand notices that we send out we would be required to make an entire copy of all the audit schedules all the documentation all those documents and can be tens hundreds thousands of pages of text most of it is going already be in the taxpayer's possession we have no problem with furnishing those documents the taxpayer if the requested I think the issue for us is is we're going to send out a notice of proposed assessment to a taxpayer. Having to furnish back all those documents and in every single circumstance the taxpayer may not need that information it's going to add additional administrative costs to to have it automatically sent out versus the way the law currently works is that if there's anything the taxpayer needs they have a right to receive. So under current law if I want the whole file I can requested but if it would be part of the proposed assessment because of proposed assessment is of a very short document it's a number just a few pages has the initial notice the taxpayer with the tax penalty and interest it has the will also there will be a typically a summary of findings as I mentioned there will be a copy of the taxpayer bill of rights that will tell the taxpayer all the rights as a taxpayer where and how to submit a protest will include a protest form that will give the deadline for filing the protest and where is to be submitted and what type of hearing that they would like to request if and in with the law I'm sorry what the law currently acts and acts in this fashion we also required let that taxpayer know if there's anything they need from us document wise here's the person you need to contact with the if they to get the documents that you need what with the way this law would work is that everything that's contained in our records would be furnished along with the notice of proposed assessment which can be as I stated tens hundreds thousands of pages of documents which would also encompass let's say a taxpayer registered a motor vehicle and they're check bounced and we sent them a notice of proposed assessment. we would be sending all of the documentation pertaining to that vehicle the registration the vehicle doesn't seem as though that taxpayer needs any of that if the taxpayer filed a report sales tax report on income tax return with us and the amount of tax owed was not sufficiently paid with the return and we would be sending a notice of proposed settlement but we would be set to be sending the all the return information the taxpayer filed so this really creates a number a tremendous amount of paper that we need to be generated and first the taxpayer and sent through the mail. Sir Clark at I appreciate what Mr hearing center is mechanism in there to to mitigate that and perhaps even allowed to be digitally I don't I don't disagree with Mr Gehring on that this section to exactly written incorrectly it is this section two is supposed to say that they're required to Give the taxpayer that information when asked not that the that is supposed to been sent out that way with every assessment that would be of extremely barred so Magri within that that was not the way that was supposed to be written. Is do we have time to fix that amended. Because I like the bill Sir Clark I just. Johnson Senator Dismang. A. N. I think earlier this school but ago so I actually think would Senator Clark wants to do is already there something's happening there's a disconnect with is constituent and DFA on this particular issue because I mean part of the you know the way that would work now if you requested information they would have to scan I mean that they would have to print a paper copy Senate certified mail they could just email it over to you at so that you can take a look at it if you request they should do that and so if there's a. I mean I'm sympathetic I understand what you're going after I really think that you've got an issue that needs to be resolved DFA now they can't talk to you directly unless you're taxpayer you know you want to bring in the conversation but I think that's that's really where you need to go because from everything you said and and don't get me wrong I think I think we're where you want to be just something happened in this particular case or issue so if I may Mr the This is my what you're telling me is that if if I file taxes and and the FAA comes back and tells me that quite a bit more money or even a little bit more money but quite a bit more money especially they have to show me how and why according to the law now they're going to send you a notice saying that they've assess something different in that notice is going to give a general description of why and how they arrive to the conclusion that you owe more on that is going to be a phone number also that that taxpayer can call and say okay well I disagree with this I need to see more to your calculation and they're gonna have to give you to support docs for that calculation. it's so that should happen right now the required to do that if it's not happening there something you've got a problem Mr Gehring asked about the nasty he suggested that but a law the as far as to a timely. The I. just as curious as what timely monthly. I agree that maybe something needs to be addressed commission on this bill either but if that because we require the same thing of taxpayers right we put in the law that you have respond before search such state I think we have a bill on the floor maybe it's passed that said if you don't respond and then so many days whatever you know is going to happen to it it's as if it's real regardless probably sent things be true DFA in a situation like this we may be having a hard time obtaining records I'm not sure that we get there this session but that's a. Belpointe. Senator Johnson Mr hearing absent the voluminous potentially voluminous amount of documentation that might be required. This current law carry the same requirements on certified mail registered mail that that Senator Clark bill has can is that done or. Would would we need this bill or something else to mandate that the current law is that the notices of proposed assessment and refund claim denials are sent by regular mail if they were to be required to be sent by certified mail they would need to be a lot change okay so if regards how we feel about section two Senator Clark that you think may have some the rest of the bill or that particular part I think is absolutely should be done and I I've. Dot my builds up Senator Clark but I would hope you all would not oppose that simply because this is proper notice to the taxpayer or something is you know it sadly the comes to tax assessments your your due process rights are kind of turned upside down as if you're guilty until proven innocent and I think at least you ought to have the opportunity to to know what it is and then you know it could be something that's absolutely just a mistake and I know you know we're all human we do that but I hope in the department would not have a problem something on that order. If I could comment on we in a review of the bill regarding the sending items by registered mail it provides a different timeline for appeals it's it begins our time essentially if the taxpayer accepted and the mail item or refuse the mail item but it did not specifically address what if the tax with the tax assessment or the refund claim comes back to the F. A. as undeliverable it kind of leaves a void on so if we send out a notice of proposed assessment and the mail is unable to deliver it because based upon the address information that was provided that person does not live there anymore that businesses moved they have not furnished in New a mailing address to DFA. It does not appear the way the bills drafted that we. How how we we give ever give that taxpayer notice if they're not able to be located under if we're to when we talk about comparisons how lawsuits are handled there is a if you're unable to locate your defendant that you need to see you there are provisions in the law for serving that defendant by warning where where you take out an ad in the in the newspaper you you a temp service upon that location but we have to be very careful about is are matters are not like losses they're not public they're not holding public proceedings they're they're they involve confidential information so what we have we have to be careful about is is correct crafting a process to give notice to those taxpayers that are cannot be located that we were going to have to start putting advertisements in the newspaper and posting notices in public places regarding. Confidential taxpayer accounts so I I just wanna be. Earful about crafting requirements for notice that we were dealing with sensitive information confidential taxpayers that we have to have an ability to provide that notice but if we're unable to to serve anything on them by a certified or registered mail that they would need to be some other process to provide appropriate notice. don't shall file certificates of indebtedness with the circuit court. We do yes and is that a public record once file it is and this is I don't see the difference well the the difference is is that the certificate of indebtedness occurs after didn't the taxpayer has the entire opportunity to appeal within the administrative process to to refute the assessment all of that entire proceeding is confidential within DFA and that process has been concluded and there is a final assessment whether through the matter being going through the administrative process which is confidential or going to court and at some point there has to be of a debt that can be collected pawn at that point yes that's the only point in if the taxpayer is going through the administrative process. that anything actually becomes a public document is when that certificate certificate of Dennis is actually filed within the circuit court. Okay thank you Mr thank you Mr. Thank you are there other questions. Saying. Mr if the committee would of. It and I know this is unusual here would like to hear the bill without with section two struck conception three renumber the section two of then the I would be glad to do that otherwise if the committee would like for me to pull down the bill or be happy to do that. the election I think section three is important but section two is always the wrong so. Seeing hearing nothing of. It would be the chair's. Opinion that would like for you to pull the bill down thank you Mr thank you members of the committee for your patience in here in this. Thank you. Members on change the Is. Let's hear. Ten fifty four and I need to call of. Senator us up because he's presenting fourteen fifty six unlikely that bill. As soon as you present your bill. Thank you Mr thank you Committee I'll be brief with this I want to first I want to thank the Department finance administration for their help on this bill they they had input as a matter of fact there's the drive that you seen from is really came from them in Arkansas we have a term that's called an isolated sale and it's really a sale of items between two individuals it does not require that you collect sales tax on that transaction all this bill does is allow that type of isolated sale to occur at a special event so what could have happened yesterday have an individual's house can happen between at a special event the very next day the cost of this is two hundred seventy two thousand dollars it puts us a little bit more in line with some of the surrounding states concerning these special events because of the way that they allow their those sales isolated sales to occur so I'm gonna leave it there and after any questions of the committee shall be glad to address those. Or other questions from committee. Our. I have a motion. Senator Hickey just clarification and I heard what you said but in it's written it's only a hundred and eighty thousand and twenty twenty two okay so in a right twenty twenty it's a year you're right. Working with everything we got going on with RSA okay okay thank you thank you talk about. We have a motion. By Senator Johnson during her second. I have a second by Senator Hickey. Is there any discussion on the motion. Seeing none. All in favor say aye. Opposed no. Congratulations. Thank you committee thank you Mr. It's not. Okay well we're at Sears centre rests Centrus. Senator Rapert you're. Fourteen six correct. Yes Sir. You ready yes Sir house bill fourteen fifty six revenue. The. I saw for the rural modernization. Is I'm sorry Adam grants well I thought I'd better shake. But I think most of you are familiar with this it's a. income tax credit for investment in the class two three. Roads for a track revitalization. Up to five thousand dollars per mile. And the the lead take any questions. Or other questions. I have a motion do pass second is there any discussion on the motion. Hearing none all in favor say aye. Those no graduation center you might affect reassuring Committee haha to each member of the. Senator Dismang you're going to present. Eleven ninety six. This is one of the bill that was sent sent over a priority from the House Revenue and Tax Committee revenue loss proximately at one point general revenues one point two million in twenty twenty two and one point six in twenty twenty three I creates new section Arkansas code to provide sales and use tax emption Purcell's water used exclusively for for the operation of a poultry farm. Or other questions. Motion to pass a motion do pass soon it is my second from soon Johnson is any discussion on the motion. Hearing none all in favor say aye. Lows NO. In a sense you also have another bill sixty ninety eight there's an amendment for six counting a kind of sympathize it down and makes it so that. Yeah. We have someone that wants to join me on this but right now it just moves so that there's a five percent collections in a ten percent collection or I think what they call that is a set off. And she can present on this there's some other provisions the bill may be worthy but probably a little bit more complicated would lead to a longer discussion so just trying to get it down to the basics. I have a motion and second to adopt in center Johnson second set. All voter say aye. Does not open your amendment is adopted. Senate. Okay you would state your name for police. Thank you Mr chair thank you Committee the bill as amended and takes out section one so skip down the section to use any of your you saying I'm sorry Lindsey French association of counties okay thank you thank you. So to use the that set off process DFA charges all entities of five percent collection assistance fee except for circuit and district courts and some housing authorities this is just lowering that ten percent fee to five percent for circuit and district courts to use this I've got said sheriff Marty Boyd here today from Craighead County uses this Faulkner County just started using this as well and it would just lower their their fee from ten percent to five percent to be on the same level playing field is all other agencies using this process. Senator Johnson. So we charge how much percent again was fringe you for Sir can District Court it's ten percent and for all other claiming agencies five persons the FNA charging correct so with. Fica number let's say they owe five thousand dollars the if and I get five hundred dollars out of the I mean I'm not saying they shouldn't get paid to collect it but should there be a cap somewhere Senator Dismang. I'm sure she would agree with that does it is what it is that's not where we are today there will be just noted a forty five thousand are lost to based on this to Central Services constitutional officers fund course that doesn't impact you know when what we're doing with RSA apps we should look at this the future would you agree. We got a lot of that to do this thank you senator thank you misprints I will say senator Johnson that we do appreciate the DFA being supportive of this bill and of this small cut and we appreciate them working with us on this. R. their quote over other questions. Senator. Senator Johnson. S. is amended as amended okay do I have a second. Senator Johnson seconds. Is there any discussion on the motion seeing none all in favor say aye. Lows NO. Motion passes. You're welcome. He's said. Your. If you would. Yes Sir Sturch nine for the record. My name is David Tollett state representative district twelve. presenting a house bill eleven fifty seven it's very simple bill and all it does is it increases the teacher income tax deduction and it takes it for two hundred fifty dollars to five hundred dollars and from five hundred dollars to a thousand dollars for a household it was one of the top scored economic bills out of the house rate of in tax with no opposition no opposition on the house floor what this bill does is it increases the tax deduction for teachers to pay for things like books school supplies computer equipment and software Athletic equipment Food for the teacher's students clothing for the teacher's students or teachers spend a lot of money on these types of things every year and this would help them out rightly and With that I'll be glad to take any questions you may have. Senator Dismang and this may be an upper part code section to this is what does this allow teachers to private schools and charter schools and and similar to also take this deduction five the way it is written according to the fiscal impact statement it says it applies to all teachers in a public and state certified school so whatever state certified school is so if it is of a private school that is a state certified school I'm I'm assuming that that I mean they would qualify so this did you mean part of this then it's going to help supplement private schools and state of Arkansas is going to take it way general revenue that could otherwise been utilized for education in the state. I yes I think the answer to that is yes but I'd appreciate it thank you. Are there other questions for securing are there other questions from the committee. Seeing nothing hearing none. Senator Hickey. Well we're in motion pro right now. I have a motion do pass is there a second. Second for Senator Ingram. Is a discussion on the motion. Hearing none all in favor say aye. Impose no. Thank you. Seven. Representative Lundstrum you still there yeah your. If you would like to see ten table. State your names for the record and who would like to present the bill. At brand a the state Senate district sixteen. Robin Lundstrum District eighty seven all right who's going to present. Thank you Sir. This bill house bill seventeen nineteen is a pilot program what we would like to do is help inmates find jobs and help reward the businesses that are willing to take the risk of hiring those inmates this bill impacts thousand inmates as they come out the first year of prison. It's rewarding the businesses to take the risk of hiring those inmates the first year at the anniversary they must work the first year. They would have a three thousand dollar. Tax credit the second year a two thousand dollar tax credit and the third year one thousand dollar tax credit this program would not start until January of twenty twenty two and the first tax credit would not take place until twenty twenty three so it has zero physical impact in twenty twenty two. The business's would take all the risk in here's what's very important we need to realize an Arkansas right now we had a really citizen right of fifty point five three percent and it cost us thirty thousand dollars a year per inmate. Just to this program alone would have a huge impact we must to do something now to address recidivism rate in Arkansas and the very first thing is help these folks get jobs and keep jobs and that first three years is the key three golden years and helping inmates we can't kick this can down the road we can't look the other way this is good policy for every single inmate and every single person the one thing I think would be also helpful to note is while yes this is a tax credit to businesses these folks we out paying their taxes as well rent buying grocery shopping in our stores and being good citizens in our community with that I would open it up to questions. Members are the questions. Anyone want to a this does have a as you can see revenue in fact join the forms here per Mr. I'd like to hear okay Mr. Okay. Mister Senator Hickey as a question it just wanted just wanna hear you say what the FY twenty two and twenty three was I understand I've got it here that's right yes as a result of the bill being amended to do two things capping the number of participants at one thousand individuals as well as moving the tax year affected too the next tax year the fiscal impact for FY twenty two is no revenue impact for FY twenty three although that you could ostensibly have up to three million dollars and credits that would be issued our estimates we are that about two point six million of the credits would be issued for the first year. Thank you and represent Lundstrum I know I talk to you about this I mean you know the issue the issue I have is that we didn't know or couldn't do our law enforcement and they were picking up this I understand it's for the businesses but it's just I don't know it just seems seems something of it that's hard about picking up this for the felons whatever we didn't do what we did for the law enforcement so no disrespect your bill Matt finish. No disrespect your bill but like Senator just wanted to to put that out there because I know you have talked about that yes Sir you've been very open about that and and while I understand and agree with you I also would say that fifty percent recidivism rate puts a stress on our law enforcement in honor society in general and businesses are taking all the risk of hiring these folks and training these folks and the longer we keep folks out of prison and are back in society the better it is for a law enforcement and all of us and we've got to move this situation back to a better conclusion for all of us I think this is good policy and and something we must do in a pilot program is a good place to start and and a good place for all of us to be and and I understand where you are and I think we could do both and we've got to make an effort to keep these folks out of prison and that would help law enforcement as well thank you ma'am. Senator Johnson you have a question thank you Mr chairman of. Represent Lundstrum I'm looking if you Senator Hickey was comparing this to a tax credit for the law enforcement officers this is a credit to the business for hiring former inmates that correct yes Sir and I must keep the job for a year so they're taking all the risk if that inmate quits and ten months eleven months. They get nothing well again I'm not John Maynard Keynes or anything but I can't help but think that the amount of money we pay to deal with in car service cost of incarcerated individuals this seems like a very nominal amount to put them on the road to being productive members of society just south like good business sense to me but and I've certainly will support your bill thank thank you I'm I would remind everybody is thirty thousand dollars a year to house an inmate if all one thousand inmates went back to prison. That's ninety thousand that's ninety million dollars if half of them if the recidivism rate holds true that's forty five million dollars. I mean no offense to them once but even a dump on can do the math we've got to do something to help these folks. All of the above we can do this and we can help people have lives and that doesn't even count paying child support rent the property groceries it's just good policy. Senator you for. Mr chairman I just I think it's a great bill and I would like to make a motion at the proper time okay let me explain to the committee are your one no vote the motion fails because within five minutes we have five in the room I understand Mr okay thank you. I have a motion to passage or second. I have a motion and a second from Senator Dismang sering discussion on the motion. All in favor say aye. Opposed. Restructure your representative was from your bill fails thank you colleagues thank you for your job Senator Dismang and can we have discussion I mean is very similar to what we just looked at with law enforcement minute with where we are in the session understand in the situation we're in I think there's a lot of merit to this bill and hopefully one that we're able to this in on a little bit earlier basis and hopefully when we're talking about priorities in the House assigning us or the you know the Senate bills they want us to vote on those include that in the package or we something that we do jointly with the Senate again I do think there's merit to the bill I mean at I think this is exactly sorry Senator Ingram but I think these are exactly the things Republican Party should be looking at doing as far as policy and and get appreciate you bringing. Thank you and I may if I may ask. Senate and I do agree with Senator Dismang and that's that's where I'm at with the thing I don't think that yours is not good policy I don't think Senator Rapert so even though I'd probably prefer was Senator Rapert said we figure out some way to fund salaries instead of credits but that being said that's based upon what the General Assembly comes up with I don't think your bill is bad is just from our standpoint we laid our essay on the desk and we had to have those bills that. We knew were included in those in those tax cuts and this was just not there it's just like the this kind of no into it and somebody has to as to say no so it's nothing nothing against your bill I'm sorry that the reason I want to go zero fiscal impact because of that specific thing and all the work that's been done but I did fail to thank the department of corrections department of workforce services the chamber of commerce and the Arkansas business chapter of the NFIB small business association that everybody has worked so hard on this and the Democrat party's also helps has been Republican and Democrat. That have all come together but I do think the committee for their time thank you Charles info centre Johnson you have a question yes Mister chairman I am I agree if everything Senator Dismang Senator Hickey said except one thing this has no fiscal impact on FY twenty two it doesn't affect our as say this would cost us to have to plan on this for the future I understand that but I think that anybody with half way like a sense could see how in the long run this will actually save the state money through savings in the department of corrections and I just started out for my colleagues to chew on thank you Sir. Thank you. Thank you chairman sample I appreciate your time thank you. Senator here you hear the president of. Eighteen sixty eight. Centerville. I'm ready yes. Thank you Mr chairman Ricky Hill Senate district twenty nine. It referred several times they this is a simple bill. I want to start out by saying the Senator Hickey there's no fiscal impact to us no revenue impact on the with this bill what this bill does essentially is that allows. Counties and cities to ask. For an electronic version of an extension from what they're showing on their sales tax to break it down he's the nicest code and that way they can develop for future economic development allows him to see where the money's coming from this it does not list any names III and numbers or anything else it just allows the the judge or the mayor to go in and study the S. to see where in their their city or the county where they need to expand or what they can expand their trying to bring new businesses the and it just kind rules down to that the the reporter are currently by we just pretty much get eight summers ation in a recognized by the number of the type of nexus codes that are involved in the US. And with that I'll take any questions. And I salute it missed request minister to take its help you with this bill so I'd like him come from last court okay thank you. In this one going to a step farther in this is not for you will information the that the applicable tax before tax force says it's okay we we understand that because. We're yes Sir as I understand the difference between this bill and the bill that I. Of. Senate bill five twenty eight. It asked for the copies of the I mean of information on rebates yes Sir this one has does not of them and has nothing like that you're simply this is simply asking for for information that so that they can do planning for economic development yes certainly we appreciate the chamber of commerce work with us to support this bill of course definite help of languages well yes Sir okay. And we understand it is not for you will and and yes if you reveal some of that information service consequences and I made it very clear to represent a park on a clear center hills well that if if there's any any other. Look that looks like a property with this the municipal leaders we understand that very well we're going to train on this to make complete circuit that confidentiality or is not gonna be violated anyway. Okay. I have a motion. What's your motion this act hello motion do pass second the center Johnson or any discussion on the motion. Hearing none all in favor say aye. Opposed no congratulations thank you. And I. Okay. Senator English if you would come four police. What check out. Are you are you. We've got to suspend the rules first. Hey them is there a motion to suspend the rules. Your of. Fifteen oh nine. Thank you very much Senator Jane English district thirty two I have a second on the I'm sorry I have a second all in favor say aye opposed no. Now Senator English Senator Jane English district thirty four and I'm here with a very simple bill that is. Wonderful and it's the Arkansas brighter future plan and basically it is the old GIS I mean gift five twenty nine education savings plan change the name to the Arkansas brighter future plan and made some updates that coincide with the federal IRS I changes and basically the plan can be used for college university vocational school procure school apprenticeship programs so it's a savings plan that parents grandparents anybody can put into this plan and even employers can put in up to five hundred dollars for an employee so as of today. February two thousand twenty one we have of forty six thousand three hundred and seventy accounts here in Arkansas. And which is may is making our Arkansas teacher writer. Or other questions. Your Mr during this. If you would you shake your head or give me a thumbs up the impact is for the computer programs and the tax form reporting is that correct. If you would come. All. Mr you're recognized Mister chair at the for this particular bill we are changing the different code provisions within the Arkansas Code to adopt a federal changes it it does have a minimal revenue impact of of twenty eight thousand dollars. If. Or other questions. Thank you yes Sir. Seeing hearing no other questions. What's will of the committee. I have a motion do pass by Senator Ingram second by Senator Hickey. We get we have senator Johnston. Yes we can we can see. All in favor say aye. Lows NO congratulations thank you very. And for those in the audience we did questions Senator Johnson about voting for this bill and he did and with that we are adjourned.