Revenue & Tax - Senate

Affixes started. Senator Teague. We'll call is the Senate Revenue and Tax Committee. Closed doors. Okay. Represented by the. Represented by the welcome if you would just state your name for the record and tell us what will your your to present and I save Mr during coming down to the join you so. We will get this meeting under under way. The representative Howard Beatty. Mr chairman members of the committee discussed house bill ten fifty. To reduce the number of employees required to mandate the electronic filing of annual withholding statements. I think this bill may have been three committee one time before but there was some discussion on the bill the Bill will. Apply to employers who have two hundred fifty or more employees are required to file their income tax withholding statements electronically. the bill would reduce that number to fifty so that the employers with fifty or more employees would be required to file income tax withholding statements electronically. It would be more consistent consistent with the requirements in our in other states. W. twos that are filed online can be processed in a couple of days rather than a couple months and under the bill as amended DFA would have the authority to waive this requirement if DF and they determined that it would cause an undue hardship for any employer with less than two hundred fifty employees and there is no revenue impact on this bill. In. Mr hearing you get anything you want. I know Senator sample DFA I'm sorry all gearing with the if they would if they would be happy to answer any questions about the bill okay and and currently the areas is at one hundred. Is that correct. That's my understanding yes Sir okay. Or. Are there any questions from members. Senator Hickey. I'm I'm sorry I'm just now seeing this just just the languages. On one thirty six. Is that correct government save this section for records with your than two hundred and fifty. We changed it to fifty so that we want to leave the two fifty right to. In center Hickey and the reason for that is that currently the law is for taxpayers to have two hundred fifty or more employees they have a legal requirement to file electronically however and just the ability to wait since we are lowering that number under this under this bill if we have some small businesses that this would create an undue hardship on them to file electronically the ability to waive would apply to employers with a less than two hundred fifty employees okay so you're just zero leave that option in place on the on the two fifty on the okay less than two fifty that's correct all right that that's fine thank you. Senator Ingram you have a question. Do we have a similar bill this to I ran I ran this bill of. Maybe Monday or and and we pulled it down and referred it back to committee. So was a problem with the bill or with sponsor the more likely the sponsor that's what I was one. All the sponsor do that terribly poor job it presenting this bill. Yeah thank you I thank my god for them forgot FOR not. Are there other questions. Seeing no questions. What's will of the committee. Okay. Okay thank you. Motion do pass center Caldwell Sekhemre Senator Johnson is or any discussion on the motion. All in favor say aye. Opposed no I should at least get six and Sam okay. Thank you. What we were all all. Can we do. Ten forty three and ten forty eight for your there so. Yes the representative body would stage ninth record again and what you what are they doing. Of. Let him tell you what we'll. Mr chairman a representative Our Lady members Katie I'll present house bill ten forty three okay all right. Ten forty three IST authorized a waiver of certain ad valorem taxes on utilities and carriers and create a statute of limitations on the collection of certain ad valorem taxes on utilities and carriers of the public service commission is responsible for assessing certain property owned by utilities and carriers. And after making an assessment the public service commission certifies the tax to DFA or collection the tax procedure act applies to most of the taxes collected by the FAA. The tax procedure act provides a statute of limitations against DFA the ability to waive assess taxes and penalties where appropriate. Such as in cases of taxpayers insolvency or bankruptcy of the TP a does not apply to the ad valorem taxes assessed by the public service commission but collected by the NSA. This bill would create the same statute of limitations on the collection of ad valorem taxes by the F. and the the bill also gives the FNA the same waiver authority for ad litem taxes. There's no revenue impact and debts older than ten years already considered uncollectible the F. and I. Further questions for represented by the. Mr. Thank you Mr chair Paul Gary with the FAA I just give a little background the as stated in the presentation bill by person Beatty the public service commission administers the tax they are also responsible for any hearings or proceedings of a taxpayer disputes or protest one of their assessments once the assessment is final at the public service commission it is the DFA's responsibility to collect that tax but the issue that we have is is there sometimes there are taxpayers that maybe they did not appeal the their assessment at the public service commission because they were a carrier and they just did not see the notice in the mail their time to protest the assessment has lapsed this is a situation it does come up from time to time and the carrier will come to DFA and have a problem with the amount of the assessment sometimes the assessment can be a multiple of of of what their religion liability would be we want to be able to help those taxpayers but currently our tax procedure act in our ability to waive interest or penalty or or to adjust the amount of tax owed we don't have that statutory authority right now under the law we have a we have the statutory authority for the taxes that we administer such as income taxes sales taxes it's natural so this would mirror the exact same statute that we have in the taxi direct for the other taxes that we are responsible for administering. Also we wanted to mere the ten year statute limitations that we have for collection on our other taxes that we that we are responsible for administering and collecting so we were just wanting to make sure that we have this of this lawful ability in the code to assist those taxpayers were clearly some type of mistake or error occurred on the recess meant. We did not share this draft bill with the public service commission and last opportunity to have a discussion about the bill and they were in full agreement with our ability to have this bill in the General Assembly happy to answer any questions. Members or other questions for you Mr urine or represented by the. Seeing. What's will of the committee. She got a motion do pass from center Johnson. Second second by Senator Caldwell injuring discussion on the motion saying none all in favor say aye. Lows NO. Your. Bills. The motion. We're now moving to House Bill Two forty eight is that correct yes Sir Mr chairman Mr chairman members of the election I've recognition representative power of eighty here to present house bill ten forty eight. Ten forty eight to authorize the offset of the tax refund toward a tax delinquency when a final assessment this issue under existing law the F. and they can offset the tax refund towards an outstanding tax that links the link was C. after certificate of indebtedness or a tax lien has been filed secure the delinquency this bill would allow the FNA to offset a tax refund towards an outstanding tax delinquency after issuance of a final assessment and before the tax lien is filed this bill will limit a taxpayer's ability to challenge any proposed assessment of tax the bill only all authorized the offset of tax refunds after tax delinquency has been established through the issuance of a final assessment if the tax delinquencies paid through the offset of a tax refund the taxpayer can avoid any damage to his or her credit rating that would be called by the filing of a tax lien there is no real revenue impact and no administrative cost For this bill. Or other question represented by. Mr hearing would you like to. Yes thank you Mr chair Paul gearing with the FAA this bill just trying to accomplish two things of course whenever we DFJ has to file a a certificate of indebtedness against a taxpayer there is an approximate eight to ten dollar cost in order to pay the clerks filing fee as well as any mailing costs and paper costs associated with the lien this bill would allow DFA to offset of delinquency that would be subject to that lean if the taxpayer is owed a refund elsewhere on their account so we're trying to avoid a lean going out to save us cost and also the taxpayer getting hit to their to their credit and but we want to make sure that was very clear that this would not affect the taxpayer's ability to to challenge the assessment they still have all of their abilities and the tax procedure act this would allow the offset it to occur before a lien was filed I'm happy to answer any questions. Members are the questions for Mr hearing. Seeing none what's will of the committee for. Got a motion do pass by Senator Johnson second from Senator Ingram compare the any discussions on the motion. Seeing none all in favor say aye. Opposed no congratulations Sir you've passed three bills on here this morning and that's unusual thank you Mr chairman thank you the members of my colleagues the the the the freshman members and sponsor these bills on I'll let him know how difficult it was today. Gentleman don't don't don't give me any ideas this is going to be a easy pass I will. Senator Wallace you have SP five forty three. Okay. Hard. Good morning Sir good morning if you would stretch to improve record and. You're presenting five forty three is that correct sure state senator Dave Wallace district twenty two. This is a steel mill bill Mississippi County isn't of course northeast Arkansas in this one the largest actually the second largest steel mill producing County. In the nation. In job growth in the still is she in Arkansas has grown by about thirty nine percent for the past ten years. For projects that qualify this bill will allow for restocking tax credits calculated this thirty percent of the expense of eligible. Equipment. And to qualify for this the project must have a total investment in excess of two hundred million dollars we already have one of those getting ready to start. It must create at least one hundred fifty new jobs and have an annual wage of seventy five thousand and just some additional information the average wage right now at one of the steel mill. It is so hundred fifty four thousand dollars a year. And this. Skilled labor not necessarily in may with a college degree so folks with just a high school degree so it is doing a great job there in Mississippi County. Tax credits will not be available until after the facility is operational in the jobs in the wages. Are met. Most importantly this legislation requires to project produce a positive cost benefit to the state. This exact bill was passed two thousand seventeen and what we're doing is extended on out out years. In there is if you look at the revenue impact statement if you look down at the bottom on the forget this is revenue impact on the second sentence it says no tax credits would be issued to a tax payer unless the project is determined to have a positive cost benefit analysis as certified by the ADC Commission and the office of economic analysis and tax research. In the. Office of economic development It is for this bill. And with that I will stand by to answer your questions. Centered did you say when the when the completion of this project is going the I'm sorry did you say did you give us a date one is this project will be complete. I did not have. Twenty three twenty twenty three Sir okay all right. Members or other questions. Senator Johnson you have. I have a motion to. This one I don't think we can hear motion on. Or at this current time. Of. Okay. If I understand this correctly and act could very well have it wrong this doesn't change the actual Year to year any year revenue impact except that it allows them because the project length is more than what we anticipated normally has in the law this just gives them longer time to claim the benefits in it would allow it is off would only occur if there's a possible impact. On our on our fiscal so perhaps Mr chairman again I'll leave it up to you but perhaps this one might. Be able to be done without I mean I know we're like we're going to deal with all these send but but the fact that it's it's not changing the the actual amount in any way of of what they would would spend on the project if anything it might even. Be a positive thing for I'm on I'm on bring Mr during that question Sir thank you Mr stern would you come up with. Thank you Mr members of the committee all hearing department of finance the ministry would explain the the revenue impact on this for us please yes Sir and as indicated in the presentation of the bill by Senator Wallace and that we are not indicating a fiscal year revenue impact that we're anticipating that would impact either the changing the forecast for effecting the governor's balanced budget the reason for that is that this is a tax credit that is conditioned upon a incentive agreement that has a positive cost benefit analysis as well as the clawback provisions within ten the incentive agreement. So this is the same analysis that we did for pop prior piece of legislation that created a new tax similar tax credit for the would industry so um. We are not anticipating that this bill would have any impact on the forecast that would be issued in in may if it were to pass. Members are the questions. Similar questions. Senator Johnson I will take. Yes motion do pass. Motion do pass for centre Johnson second by Senator Ingram is there any discussion on the motion. Senator Teague you're looking at me with a. Record. Your thank you note. Sure. Back in what seems like another lifetime I worked advising industries only programs like this and it was usual originally was that there was a three year period and then I think that and this is for and we're looking at six of course as you know senator Wallace back in those days we were talking about much smaller projects and steel mills I mean this was when we got our first steel mill and I guess his armor L. I don't know which one got it but but this is a really big deal Arkansas and both the the of what it was to the community and and the Northeast Arkansas has been a tremendous thing and I I recognize that what we're doing is we're we're this is a megaproject we don't get a lot of mega projects so I I just encourage everyone to to cooperate with the situation that the folks over Mississippi County obscene and and give them you know the longer time to complete what is obviously I have never designed the steel mill but I but it's a whole lot more complicated than just about any kind of industrial thing that that we would ever do in the state so I encourage everyone to to support the bill okay Senator Ingram you have. Yeah it has to have a positive impact or or we won't let it out we've already of the salt of the the legislation that Senator Dismang had a four million dollar positive impact to the state of we let that out so I don't see any difference in this and I'd urge you to support this Sir what bill. recommend. Senator Dismang you have anything on this this is all okay all right. motion for us is to pass. All in favor say aye. All opposed no. Congratulations your thank you senator bill passed and. You have a. Senate bill two Senate bill ten this. This Robbie joins the table. Sir Ken states Dave Wallace district twenty two. If I may continue Sir yes Sir this is Bob creamer sentiment what we've done on the. Working taxpayer credit Senator Wallace if you would please. You if you have a against I mean you have some on the first test for a few murders. Then for yourself for the record having issues Holdsclaw. Okay all right great still richer. If you're not working you will get this credit. It's designed to help folks like our firm and our police officers or teachers we drop the percentage from ten percent down to three percent which is a drastic reduction it's a it's a. Really good bill and with that I will have a me speak to it. All right yes ma'am thank you thanks so much senator Wallace thank you chairman and thank members of the committee. My name's Abby Hughes Holcomb a resident of Pulaski County but born and raised in hot spring county. I'm here as the senior director of the Arkansas asset funders network which is an organization that strives to create economic mobility and independence for working our Kansans. I thank senator Wallace and for Senate bill ten and it would add that we get working our Kansans a much needed tax credit. But moreover I really appreciate his leadership on behalf of hundreds of thousands of our Kansans who work hard and work smart but at the end of every month still come up short. I want to stress that forty six percent of the population in our state falls into this category that's almost half. Almost half of your constituents or struggling and we all know they're struggling more this year than any other year. Roughly three hundred thousand Arkansas children live in these households that I'm talking about and would benefit from this credit. In addition cutting income taxes for these hard working families Senate bill ten even as amended still packs a real economic punch that would help us all. Just in the districts alone that you represent that's more than five point four million and economic activity that could be expected back into your district if you were to pass this bill. But I don't want to focus just on the backs in the statistics even though they are very compelling. I'd like to put a real face on these numbers. Our neighbors our communities. That's how Senate bill ten really makes this real and measurable difference. Tell you a quick story about Kasandra she's a childcare teacher in Farmington Arkansas she loves her work her children love her and it's her real passion she's a single mom that works forty hours a week she hustles and yes she struggles what would the tax credit do for her it put some tanking or gas a gas and her tank rather it would help out with groceries for a week might even buy her daughter a new pair she's. Also tell you that this bills personal my brother he's a college graduate Mary three spunky eight nephews of mine three kids he's in Fayetteville he works for the state department of education he and his wife together with her small business income and substitute teaching make less than fifty thousand dollars a year. They too would qualify for this credit and I ask him what would you do with that extra money and he said he'd put it towards the new tires that he's been saving up to buy. I feel sure that you know many stories like my brothers and like Cassandra they're the backbone of our economy there are teachers nurses child care providers first responders and I could go on and on there are hard working average our Kansans who are quite frankly not average at all. I look to this committee to give this bill your full consideration I ask you to be bold champions for your constituents and the hardworking our Kansans across this state. I know there are several bills that are competing for your attention what makes this bill so different. Senate bill ten provides relief to every working tax paying our cans and that qualifies not just those who might be purchasing a used car this year. Senate bill ten is a holistic approach that many other states have already taken. Your support would mean and median and impactful Tax credit to your constituents and your support would stimulate your local economies as the data already tells us. This money is spent locally your support would mean that working our Kansans have allies up here in Little Rock who acknowledge their contributions thanks for your time and consideration of this important piece of legislation thank you senator Wallace. Other questions for the witness. Senator go with. Well anyone that does not earn money on a W. two or ten ninety nine receive any tax refund from the state. Are there other questions. Thank you thank you ma'am. Now I will bring up Mr program would be if not. Skews me. This your name for the record in your. Your revenue impact thank you Mr chairman thank you members of the committee if they issued a revised fiscal impact statement based upon the amendment that was made to the bill to decrease the credit from ten percent to three percent that revised fiscal impact statement now is twenty three point two million a reduction in general revenue for fiscal year two thousand twenty two one other issue that we did note is that under the federal American rescue plan the EITC was broadened at the federal level so it is quite likely that that the amount of the ITC's that are available to you Arkansas working individuals and families that revenue impact could increase but we are not going to know exactly and tell those returns are filed in future years as to how much that The New amount of EITC that will be granted to Arkansas taxpayers on their federal returns I'd be happy to answer any questions. Members as you Senator Johnson your question thank you Mr chairman. Excuse me Mr during. I have I understand what you just told me but I guess I have can look down the road. So by the way the formula works in this legislation. we would be. How may this a negative way we would be advocating or off giving to Congress the authority to ultimately set whatever that that rate of the of the great ideas so with if it's three percent of the federal credit and they change the rules somewhere other than increases what that basis is can we would see a commensurate increase in the amount of credit that's granted in Arkansas without the legislature reviewing or doing anything at all is that correct that is correct legislature could certainly come back in in the end after the for after the fact but certainly if the as the as the Congress is done just here in with the American rescue plan last month they did brought it brought a credit to it with the target of the working individuals that do not have children as well as they removed the restriction of individuals over the age of sixty five of course we're going to see the actual data in future years when those federal returns are filed but I think the estimate that we've seen so far as the average. tax break under the American rescue plans change the S. T. E. I. T. C. is about seven hundred dollars per taxpayer on their federal returns so at three percent it looks like the the impact at this point is not going to be considerable increase to but certainly we are dissipating that the revenue impact would would could be higher in future years as more III TC's are granted to Arkansas taxpayers. All right thank you Mr thank you Mr Senator Hickey you have a question right just just back to center call was question a few minutes ago when he ask it one way of about the sum I wasn't working would it be refunded to them. But if it exceeds our tax liability according to this it will be refundable the amount over and above what their tax liability is that correct that's correct okay is is there an amount of income that they have to have before this would go into play or with somebody in a hundred dollars it's it's set at the federal level as to the the the relevant ranges of of income I'd be happy to get those exact numbers that qualify for the EITC I just don't have them with me but it is it is established at the federal level okay. What we would have that answer. It. I'll just wait and get it from her thank you thank you yes Sir. Thank you Sir. State your name for the record. And if you would answer center. Hickey's question you heard what I said R. S. ma'am I served at abbey Hughes Holtzclaw so Senator Hickey for the federal earned income tax credit there's couple considerations to take and it depends on if you were a single No child married and so there's a scale and it starts at. Earning two dollars up to I'm sorry we go back no children for single head of household qualifying widow income must be less than fifteen thousand eight hundred and twenty dollars so anywhere from one dollar earned income to fifteen thousand eight hundred twenty dollars and you we get somewhere between this is the federal not that Arkansas two dollars up to five hundred and thirty eight dollars and as an individual whether married filing jointly with children up to three children the credit phases out so there's a point where at the Max so at the moment at the Max income that you can make which would make you married filing jointly with three or more children the most you can make to receive any credit would be fifty six thousand eight hundred forty four dollars and then that would phase out. Okay I was I was interested in the least that you might want to also give those so basically you're coming a dollar two dollars and you can you can qualify for right but you wouldn't get the full necessarily the full refund ability because that as you earn the credit has the most impact and then as you earn more it phases out over over your income thank you ma'am. Are there other questions from which forward saying and thank you ma'am again. All right. We do have one other person Is made or make up missed school. Thank you. Mr corn we're committed to committee if you have anything that Sandman said we'd appreciate hearing you're speaking for the bill is that correct yes chairman thank you would statement for the record and about men and I'm the executive director of the women's foundation of Arkansas and I should be a familiar face I joined senator Wallace originally we first introduced the bill and. But today I'm here in support of the bill as amended again I'm representing the women of Arkansas and as the previous witness stated not only working families ballroom Arkansas which make up you know almost half of our population when you look at you deep dive into that it's predominantly women and several states have looked at innovative strategies to support economic security for women and their children and I ate today come before you to respectfully ask you to consider the women in each of your districts and their children and what this does mean and again as she talked about the earning potential with the new states The New state My goodness our minimum wage if you work you know a full time job minimum wage at forty hours a week fifty two weeks a year you know your earning potential is really barely over twenty thousand dollars and so where do you live you know what's the roof over your head look like what is the food that you're putting your children's bodies and how are you investing in this type of income what is your emergency savings look like so you know if your tires go out on your car you know how are you going to pay to get those tires without really a great expensive to sign on paying my rent that month or my electricity bill or food on my table so again I'm supporters bills for the women of Arkansas appreciate your consideration appreciate senator Wallace and the work that he's done to amend it to bring it before you today thank you thank you members are the questions from a school. Seeing thank you. Senator Wallace would you like to close for you yes Sir just briefly. No members if you sent once would you turn on Markopoulos. Thank you Sir yes Sir. Members and in years past. I've I've been opposed earned income credit. Top bills like this. This was different. This one. Helps those that are paying taxes into the state of Arkansas. These are helping working Arkansans is helping our nursery school teachers is helping our police officers. Is helping those that are the foundation that backbone. Of Arkansas the men and women they get up everyday and go to work. To provide for their families. This is a chance to help banking loosely one out of every two our Kansans the state of Arkansas. We all carry a lot of bills I to this is a good bill I'm proud of it and so with that I am closed. Thank you we appreciate you bringing this bill but as you're aware of or. Per policy we're not going to take a vote on this bill thank you. Thank you and now. Yes. House Bill fifteen forty three representatives VOL. Mister chair Mister Sandra call your join me at the table with the assessment coordination board. I'm sorry it may miss Sandra collier general Mitchell thank you Sir. Mmhm. And if both of you would take and state your names for the record please representative DM Vaught. Senator Carter director assessment coordination division of DFA. Well. You'll remember maybe a couple years ago and the chicken house tax went up without anybody kind of knowing that it was go into and it kind of. What a lot of people off guard our assessors took a lot of heat and I'm trying to protect them as I am trying to make sure that we all know what's going on in our in our districts also so this will bring an annual report to the A. L. C. every year and it will also before a new taxes been implemented. If it's not been done in five years an assessment moved that hasn't been done in five years is that right if the guidelines have not yet the guidelines have not been updated in five years they'll bring it before us just so we know what's going on we're not make an assessment we're not changing any of that it will just be for information for us Onley. Ms Carter you. Yes thank you Mister chair I am so grateful to representative bought for help but let us help her with this a great legislation this recording will be a great communication tool for us thank you to be able to see what is happening in the local communities and schools with our property tax system and also personally I'm very excited about the possibilities of also being able to showcase in this report the great work that our local county assessors are doing on the ground and don't usually get a lot of praise for but with that I'd be happy to take any questions members or other questions. Senator Teague. Mr chairman thank you are you tell me that now there's a report that shows every piece of taxable property in the State. There if if I understand it right there was a statute or there is a statute on the books from many many years ago that was a by you know by eMule report that was to be given to the governor but I also was told when we started talking about this that that report had not been done in many many years and this will just be making an annual report with even more this should be huge report. Well me every piece of property indivisible Julian places a property right yes but it would be more of just of of grouping of different values by county school district show all the taxable property in the state yes but it would not all the property would that be item after item after item that's not the way that we interpret it we think it would be more of just a table based by school district or different categories that would give you for your particular distribution be able to look and see you know what and property or residential property sales value she said show all the tax property the state including without limitation the assessed value of each property and other ad valorem information that's like each property to me. Is that what you want to do I'm just I'm okay. but I it says like a. One massive piece of documentation if you do what you're saying you're going to do we intended it to do as she was saying what she's alluding to a so you're going to ignore the law to. What you want to. No no. No. Our I mean does it not say that they did not anyway I appreciate it I'm on your side but I think I think that says that you do every piece of property of my life for say well I'd ask her she's not a. Yes senator take and and I do understand what you're saying I do believe that language was actually taken from the original statute and and and I I agree it could be interpreted that way but our intention was really to do it more of you don't level of values. So it says you added to the property of each property and other well with the under landed means this new language all this. I'm going to vote for it but I think your vote for the. Yes Sir I do see what you're saying I do see that and again our intention with this report is to break it down into a nice where you would be able to look pull that report up and look at what's happening in your communities but as far as a listing of every parcel number in the state that probably would be very hard to accomplish. Senator go. Thank you Mr chairman I re sent to you guys what language this you know we we say all time we don't pass bad bills it's a good bill good intent which the language is wrong I really suggest chocolate now go back in incorrect language because I will vote no on the bill I'm I'm for the bill don't get me wrong but I'm tired of passing bad language and trying to have to go back and fix it senator you drive the that's what it says and and I would ask you pull down and and and and try to re write that language. Mr chairman. So I apologize for Senator Hickey for BT to that one Well in in our. I thank the terabyte now for a lot more than it can chew you also in our I would really think that you would as a legislator would want taken pull this down it and correct it it's a big box right there we'll get an amendment. And I don't think anybody is against your bill right now we just want something in the law that you can't do that exactly thank you will pull it down and make an amendment come back all right thank thank you thank you. Okay and I mean and without members we are adjourned.