Revenue & Taxation- House

House Bill eleven sixty this is the tax for the tax exemption for the motor vehicles just want to say to the committee. I'm sorry. Do pass. Second. There's a paid it was a funny buddy thank you to hear that anybody yeah I heard it no you did not you did I think that you're static national side represent the very very kind to work with this this thing's been one moment one moment moment we think we got it next one we don't but long story short he understands or in whole this bill until we get to the back in session thereof may be stored so a reserve pay not appreciate your patience Sir thank you Mr chairman thank you members good afternoon of house bill eleven sixty is seeking to bring a little used car sales tax relief to the general public and I think most of you are probably co sponsors on it seems like a lot of members are two years ago we had nearly everybody vote for it and it got hung up in the Senate so we're trying to make sure that when you pass it out here if you pass out here that we have clear sailing on the Senate in but I'm here to answer questions mainly right now if a int- if a used vehicle sells for four thousand dollars or less we do not charge sales tax I'm seeking to raise that exemption to seventy five hundred and then in two years to ten thousand Arkansas is a rule state it's really hard to have a job in Arkansas within walking distance of your house and people need dependable transportation in order to get back and forth to work hard working people with a tight budget have a lot of hurdles to overcome if they're going by inexpensive transportation. Not the least of which is a down payment insurance full coverage that may not have had it if I have a cheap trade in where they just had liability all of this puts a real strain on their cash flow for the next four to six weeks or longer as they're trying to scratch together every nickel they can to make a down payment if you're buying an inexpensive vehicle it doesn't qualify for the same financing as a nice vehicle does so financing is a challenging the more down payment you can have the better off you are. The this what we're seeking to do here is to not get in their pocket for the sales tax when they're trying to cash flow the other demands in getting affordable transportation these vehicles have already probably changed hands a truck before it gets to this price range six times we would have collected collected sales tax on it six times a car two and a half times we would have collected sales tax on it two and a half times by by the time I got to this price range so we're asking for a little bit sales tax relief for hard working needy are Kansans but it doesn't stop there it's available to anybody you know somebody who's sending a child to school or college or just somebody wants to be frugal with their budget this is a tax cut that's available to everybody this committee has passed out tax cuts you know that were based on income and an upper income tax brackets and things like that this is that this is a tax break for the people that desperately need it and if we want them to have good dependable jobs any good dependable transportation you just can't get that for four thousand dollars anymore we need to be able to raise that to seventy five hundred and then two years the ten thousand because the computers were down I couldn't pull it up there at the last minute I'll give you the fiscal impact by memory. But this we have a copy okay great well it's hard interpret but based on recent pains okay when you give the sponsor of a bill copy of. I have a copy the fiscal impact. All right the second region pay will get you copied under Sir okay. To the bill's been amended a couple of times that change the fiscal impact statement and it makes it a little hard to read but this bill becomes effective in September so it's a partial year the first year fiscal impact is like nine million. A full year at the seventy five hundred has a fiscal impact of twelve point six million. And a full year after we go to ten thousand has a fiscal impact just under twenty eight million that's the full year okay but because the way this is structured you have a partial year next year then you'll have a little under nine million the following year then they'll go if I remember right twenty three year it's in the upper teens the next year and then as and the full effect comes in at around twenty five million I think after that. Anyway I'm ready for questions thank you Mr thank you communication paint written warning a question Sir. Thank you Mr he he answered the gentleman in my community it said the at least five times turnover paying sales tax so you're right there yeah that's it that's interesting. Thank you representative Cllr. Represented by a number I want to go to a different angle of this then the numbers. You mentioned something about helping low income families particularly get dependable transportation to and from work. And I don't I know there's not a report but in your personal observation. Do you think this is going to help people who can't get to work now be able to obtain transportation to go to work absolutely so I if I could take just a little bit time I grew up in the car business I was fourteen or fifteen years old sitting across the desk from people trying to buy a car and helping them figure their budget for the next sixty days every paycheck every day to be able to scratch up a down payment. And the insurance and first payment which is due in thirty days registering the vehicle. It is a tremendous hurdle. And. The difference between having five hundred down a thousand down. Get injured interest rate from fifteen percent to five percent. Because if you can get enough of a down payment to move them out of that high risk category and have equity in their car they can obtain better finance rates and we're talking about cheap cars don't qualify for the two point nine percent interest you know because they're too old and and too many miles but from the other side of it I'm an employer. And I've got people who work for me and they don't show up and you find out two hours later it's because the car broke down it wouldn't start this morning and find a ride to work. Dependable employees need dependable transportation or that they can't be dependable for the employer either so so being able to help. People get into dependable transportation which I would argue for my experience in the car business does not exist at four thousand dollars and below anymore. Is is my primary objective with this bill Mr so if I understand you correctly you feel not only from a financial standpoint but this is going to help our workforce availability and and dependability is that correct that is correct thank thank you thank you senator questions. Anybody not as we speak against the bill. For the bill. President paid close rebuilder I'll close thank you committee I appreciate y'all moving this is how your property list I know you have a limit on how many bills you can pass out here but the I'd love to see this will make it through thank you thank you would appreciate coming in. Russian Maddox you ready go. President Maddox on his extremely nervous coming from this committee so you allowed him up. I am actually I you give me such a difficult time about it so my per se Mr you are recognized to hide John Maddox district twenty so I'll be very brief members appreciate your having me my bill is very simple HB Fortino three all this bill does is cut the top rate from five point nine to five point eight that's all it does I have thirty eight house co sponsors the governor is also supportive of this measure of biz with them on numerous occasions I do just want to give my my plea about. I'm passionate about reducing the income tax I'm passion about rewarding people for work I think we need to send the right message I know a lot of you are probably follow it as closely as I do Arkansas is doing very well in inbound migration people are moving here which is great I think one of the reasons is our marketing. Continuing to reduce income tax I think help with that it's not a big obviously five point ninety five point eight but I think it keeps our positive momentum. I don't know if you all saw this the Mississippi. State house has voted to completely eliminate their income tax I don't know what's going to happen with that but there is something I think certainly we don't want to do that I think we need to keep moving the ball in the right direction it is my opinion accident something I'm very very very passionate about. One thing I do want to address this have it members member say that this only helps the rich or the top earners I would just say that. You know a single mom or dad is making eighty thousand dollars a year it if you can find one of them who tells you that that they're rich and they don't need a little help I would be surprised frankly you know when and where our tax system as you guys know better than I do but we have tax cliffs they're very punitive as opposed to a marginal tax rate our system is very punitive in my opinion and then the last thing I want to say. At least in my district I think all of the state of Arkansas I would consider this a small business tax cut the vast majority of entities I say in my district LLC's by far we have a lot of course partnership sole proprietorship in those things this would benefit them. So the. but you know any corner Business restaurant is that are those are mainly L. season my experience this with this will cut their that their expenses a little bit help them with the minimum wage that they're dealing with now and I think continue to keep Arkansas competitive. So that is all that I have The guy to take any questions any questions. I guess my my question the understand you know we have a certain amount of money coming that we can we can spend how would you how would you how would you rank this bill compared to the other bills that you now and how would you how would you thank you we will pay for this yes of course that's that's the best question not I think my bills number one frankly number two at the worst so that's my opinion frankly the governor talked about we can spend I think you talked about spending fifty million for tax cuts this is me twenty seven million annually so there's still room to do something else in the lower middle sized twenty seven million dollars year frankly I think we'll do it and growth I know some people are skeptical that I think we can do it in growth you know one of the things we did when we when we started collecting online taxes I think our tax collections are are are going very well I think we can easily handle twenty seven million I I think we can frankly do it their growth they're more people continue to moved Arkansas and that's that's one reason I'm running trying to run this bill to thank you Sir thank you Mister lucky day DFA just walked in to give us their official your term absolutely Sorry I'm on a kind of an economic development rolled down here representative Maddox and this is probably a question you cannot answer that you might be able to get a report. Is there any projections that if we do lower this. On the from the department of commerce how many people might be moving into our state that would become you taxpayers I know that does affect figure into DFI but is there any forecast owns new taxpayers moving into our state ticket office at this tax reduction. I will have to try to find out I do not have that information I would say is the last thing I'll say is that that that's a very great point I'll try to find out of that that is available you know if we put a little bit more money in people's pockets they're gonna do one or two things with it they're going to spend it which is great because it has been at our restaurants are places still clothing those things locally which we're gonna get portion that sales tax revenue that the center says Porter businesses or they're gonna save it which is also great so I that in either one of those things are good are excellent and so That's my position thank you. VOL you go to in the table give us the Fischel a governor's position please. Thank you Mr chairman members of the committee Paul hearing Arkansas department of finance administration. We apologize for the mix up with the getting to the committee meeting on time we were sent a memo out to the house look next time buddy I'm not my apologies we we never like to be late for the start of a meeting policies accepted we understand that so we did prepare a fiscal impact statement for house bill Fortino three to reduce the the top rate down to five point eight percent of forgetting January one of two thousand twenty two as this is a an income tax bill that begins at the beginning of a calendar year the revenue impact for FY twenty two is approximately one half of the full year fiscal impact of their which is. Thirteen point seven million dollars of the full fiscal year impact for this bill would be twenty seven point four million dollars be happy to answer any questions about the fiscal impact statement to the generation any official opinion on this well we certainly have the the governor's office says proposed approximately fifty million dollars in income tax reductions for this legislative session this this bill now those propose income tax cuts. For this legislative session we're designed to benefit the individuals that were in the low to low middle incomes this certainly would if if impact those taxpayers that are paying in the middle table that are paying at the the five point nine percent rate but they would also impact those individuals that are paying in the top income tax rate those individuals did receive a reduction in the last legislative session to bring the top breakdown so um this would be we are always in favor of relieving the income tax burden on Arkansas citizens but the preference will for the governor's office for this session would to be to direct the tax relief to those lower income individuals. Thank you members any questions. Nobody else will speak against the bill. For the bill reserve Garner you're recognized now. Sorry I just have a question is there is there a natural break if we were to go with the lower middle income is their natural break for we could give the tax benefit to those groups and not. Two hundred fifty and above for million and above or where is there a kind of a natural break. We're we might look at that higher income bracket currently that that the top income table begins at approximately. seventy I'm so seventy nine eighty thousand dollars right in in net taxable incomes that's where it begins that the top table has a two percent four percent five point nine percent rate five four point five point nine percent rate kicks in a pretty low level if there were to be a the ability to have a target the relief in those upper incomes you probably need to restructure that the current format at the two four five point nine percent rate in the top table in order to targeted that relief in not necessarily made if you want to target relief to the upper middle incomes you would. Probably need to restructure that current table and if we wanted to get the lower middle lower it but we certainly right now we have a low income table that tops out around twenty three thousand okay taxable income and then from twenty three to about eighty in net taxable income we have the middle income table so the way that the General Assembly divided the tables in the two thousand and fifteen session right a may starts the top yeah it certainly makes it easy for the General Assembly to target tax relief if you want to target lower incomes middle incomes are upper incomes the issue that does get created and the General Assembly does try to make sure that they fix is that whenever you cut rates in one of those tables you can create a cliff affect road tween those tables so what what we have right now between the middle table number table is a is a bracket adjustment. and between those between to alleviate that burden traditionally it's it's somewhere in the neighborhood of two hundred fifty to three hundred dollars that bracket just meant is designed to alleviate it brings it down to around low one hundred dollars currently there is a cliff between the the low and the middles as well but it's not as pronounced. Your card under. Thank you members any other questions. The body also speak against a bill. For the bill remission close rebuilder. Yes and thank you committee I appreciate you all listen to me I'm not bothered a lot of you about this bill already I do wanna say we'll try to get some clarity but in my conversation governor's office they are supportive of this I met with him again last week he's a commission that he is supportive so we'll get you some clarity on that we don't have any conflict there but I appreciate your time and consideration no thank you Sir hello to you quite a bit about your bill we got a good bill and I think the committees you know for the money's there but I think about it in support of this in appreciate you. All right members that a judge we're kind of skipped around agenda president Wardlaw you and you'll come up. Members this is the bill that depends on how the committee wants to vote this week we will take a vote on this today on this bill so based on the testimony or fiction here some get sideways or visit that but right now just be prepared you know it's most make a motion the chair will accept it right now president will your honor recognize yourself and you're in my presence start. Thank you Mr chairman I'm sorry Sturch bill numbers seventeen oh six members and I think this Stachel pass set out. I'm sorry was present more we'll pass the bill a mature all understand what's going on here. Thank you Richard. Okay my apology Sir go ahead and used if you're ready. Representative Jeff Wardlaw district eight of. Here. We can still go with the railroad tax cut bill for tax credits today its the Creation of logging and trucking jobs Miti we have been trying for this makes a second session to get some help for the logging industry and the recycle tax cuts have never been available for that industry and that was the whole gold here and we drafted legislation we send it to D. F. and ES and ADC. And in that draft legislation they didn't they couldn't find a way to count those logging jobs off the site from the pellet mill so we work with those guys they basically re drafted the whole bill. And now they do receive the recycle of tax cuts but the way those will be received as they will only receive once the meal is in production and going which means they are a taxpayer at that time therefore this bill will not have an impact on the state budget it will be a a revenue generator and we'll give those folks credit on the equipment they purchase to be able to open that meal and with that I'll be happy to take any questions and I have beside me secretary Mike Preston secretary Larry Walters in a room of both of those guys teams have been also come and helped draft this great piece of legislation to help our timber street across state. Okay image press if you don't care would you please just tell the work what to the committee how this process works how somebody committee comes in how you that the process I mean I'm sorry how company comes in how you that to process Hey you set that motion I do the claw backs just kind of walk through the fifty thousand foot view if you will yes thank you chairman and representative Wardlaw appreciate your work on this this is this is an important piece of legislation for us such an important industry in our state the timber industry really is one that we continue to target and look for new opportunities as representative mentioned this is giving this industry an opportunity to be eligible for the recycling tax credits we have worked very closely with the FNA and the the bill sponsor regarding this particular piece of legislation because we wanted to get it right I want to get it right on the front end that allows us to essentially have another tool in our tool kit to go in and recruit this industry by opening up but what allows us to do is still to go through our evaluation of a a project so would be a project by project analysis hitting the certain guidelines to then be eligible for the recycling tax credit so we would still need to do our analysis that it yields a positive cost benefit to the state of Arkansas is represented mentions in the form of a tax credit so they would need to come in actually invest the investment pay the wages of this or you're going to to pay create the number of jobs and hit that investment threshold that within of them allow them to be eligible for the tax credit and that that do time they'd be eligible to receive that so we do look at this is a very favorable piece of legislation is gonna allow us to continue to help recruit more industry within the timber industry and certainly be a benefit to Arkansas. Mr chairman I would add that this legislation started out basically for the wood pellet industry but what it has turned into is any wood industry that is moving towards manufacturing of products would qualify for this tax credit as long as they hit those same markers that secretary hit so you know anybody in the wood industry would qualify here but it it was it was legislation was brought to us for the pellet industry but it's turned into being opened for the timber industry I'll just mention that this is one that's been very beneficial in the steel industry for our state it's kind of set us apart being able to qualify for this recycling tax credit and allows us to to now be you know a world leader in steel production a representative Hodges I see down there then this table now has in his county to the top steel producing county in the tire country due in part because of legislation that this body has passed to allow us to do this we're extremely competitive in wood and timber industry but we can be more so with a bill like this. Thank you Sir many questions percent of these. Thank you my cooking that the who can the tax credits be sold to is there any limitation on if these tax credits can be sold in one. NO sorry did taxpayer in Arkansas it is arguable that that set up a taxable presence in the state. Any other questions members. All you care to give us DFA's professional opinion. Thank you Mr chair members of the committee D. if they did work with the eighty SI representative Wardlaw over the past several months on this bill to get the language that so that it could be administered by by the Department commerce as well as by DFA we did provide a fiscal impact statement on this bill today as noted in the revenue impact per there's a per project amount that capped a five million dollars in credits that could be redeemed per year per project but of course there is no a fiscal year impact that we have indicate on this bill because this bill requires that there be and approved incentive agreement between the project as well as ADC that were contains the performance criteria as well as clawback provisions. Happy to answer any questions about the fiscal impact statement president Clerk a question. Paul thank you know you're always in the hot seat while I understand For the clarity of others that are you watching listening and so that we communicate clearly on the same page can you describe the difference between a five million dollar tax credit on new revenue versus a five million dollar reduction and general revenues you don't show a reduction in general revenue which is true but I think sometimes we get in a we get those two those are huge differences between we're not talking about a five million dollar reduction to revenue this is a five million dollar tax credit to new revenue I understand you correctly this is a a five million dollar per project cap look can be redeemed no Sir we don't lose general revenues this is just a tax credit on you revenue being generated this is an economic incentive to try yes to provide that that does require a positive cost benefit analysis and also it's contingent upon there being an incentive agreement signed between the taxpayer and eighty C. that has the clawback provisions let's have the cost benefit analysis so that's why we do not have a a general revenue hit in the accident thank you just want to make sure everybody understood we're not giving away anything or reducing anything regaining something here yes thank you that's correct Sir. General questions. If anybody else will speak against the bill. For the bill. There's Wardlaw you will close for you bill Sir. All I'm sorry hold on just second step to me somebody signed up to speak I want to speak to that okay good I did bring and and for the lack of time for the committee I did bring some people to speak in favor of the bill brought the mayor Stephens you would stand up Sir. This man spent stands with the chance to get one these pellet mills in this town of great big deal number of the economic development ma'am Mr semen from Camden. And he has some would folks actually talking to him about some things going on in Camden so these guys are big support and I want to make sure committee knows or here but I want to take a lot of time from the Committee thank you very much appreciate that. Smith chairman with this bill I just wanted to committed no this is an economic development bill this helps south west and north Arkansas in the timbers strained industry we've got eleven million tonnes of timber in excess stand in on the stock today this projected projects going on take care about three million of that so we still have some work to do in that industry to make sure our state stays healthy and keeps our forest fires down and with that I'd appreciate a good vote thank you Russian Wardlaw we have a motion from representative Betty. To make muster motion do pass a motion to pass any debate members. All in favor say aye all right opposed regulation guys your pastor bill thank you Mister Committee welcome. Thank you yes consensus. Personalized service will back to members this is go back up to The the gentleman on a prison lasting got seventeen nineteen ready to go on that regionalization. We're back to where we were Incredible stuff here for a little bit again. Numbers beat the house bill seventeen nineteen. You're good now. Thank you chairman I would like to give you a quick overview of this bill and I'm with the chairman's indulgence we have a number of people that would like to come and speak but weren't able to come today but I would like to give you an overview so that when they do we can save a little time this bill is born out of a serious need we have in Arkansas to help inmates find jobs We've nickname this the rebate program just because it takes too long to say we need to help invents find jobs because every time minimum wage goes up inmates jobs potential go down in the state of Arkansas we have about ten thousand inmates to graduate out of our penal system every year and they're out there looking for jobs and it's extremely hard for them to find a job I want to start by thanking and director Solomon graves and the FNA is Larry Walter follows injuries Childers jim Hudson NFIB and folks at the department of workforce services this is been a collaborative effort of gargantuan. I I can't believe all the different people that have stepped up and said these folks need our help and once they get a job they appreciate the job and I really want you to have a chance to hear from them. What this basically is amendment shall is once this person gets a job the business gets a three thousand dollar tax credit the first year upon the anniversary keeping that job the reason it's a three thousand dollar tax credit is because the business has to coach that person into what a job is and they work within that first year then the next year it's a two thousand dollar credit and the third years a one thousand dollar credit the reason it's three years is that three years as a golden time the you decide whether you're going to go back to prison are you decide whether you gonna have a real life and have have a life that becomes meaningful again that's a golden three years for that person coming out of prison. I know that sounds like a lot of money but when we has a prisoner in the state of Arkansas it's thirty thousand dollars a year so six thousand versus ninety thousand even a dump on can do the math so. and it's very hard to figure out the all the ins and outs of this but I just made a short list. Yes the business is going to get a tax credit but we're also going to get income taxes state taxes said gas taxes alimony child support their shopping in our stores they're renting our apartments and they're living a life that's a real life not a jail life and with that I would take sponsors and co sponsors so if anybody wants to join the bill that cannot take questions thank you ma'am any questions members remember you're recognized. Sorry and I also want to add this is a pilot program because it's gonna take a little bit of work and time to get all the ins and outs and. So it's not going to help everybody it's going to be a process. thank you Mr chair of representative Lundstrum of the bill I left everything behind it I'm just curious how you came up with the three thousand two thousand one thousand if there was something that you specifically used to pose for the magic numbers we're just we're trying to help in so many ways of saying you know you've got a used car sales tax yes about yes and I didn't know playing with some of those numbers of the two thousand one thousand now I have seen it or yeah there wasn't any magic number there is actually a military program that we're going to mere this after that military tax credit that goes up to nine thousand five hundred dollars there isn't a magic number I'll take input I just think it needs to be a good number because we're asking businesses to coach these folks up and help them reprogramming retool And maybe that's not enough I don't know I'm I'm open to suggestions I don't think we can go less though because we are asking a lot of businesses but I knew no they appreciate it I think one gentleman put it best when she give a fellow job he's going to be loyal and he is going to make the most of it and you'd be amazed at what people can do. Region one recognized. Thank you Mr chair. I know that the. We have just entered into this and hot springs a program called the restore hope yes it's actually worked with I didn't that I've been looking at a ton of different programs this this thing has been a joy to work on their end we need these wraparound programs like that one thing they need this type of thing where a business can get a little bit some a little bit of a something out of it and this is the perfect thing to marry with that that's a program and the I mean a lot of what you're talking about because they've been trying to do reduce the recidivism. Without the financial incentive mmhm they've just been trying to get employers to hire the people so this is the missing component and the that was a Paul has worked at the pleasure of the governor doing this just think those two go hand in hand I'm really excited to see a former representative Charlotte Douglas has really taken off with hers and for Fort Smith and so I'm excited if we can partner those two I think we can make some good things happen so thank you. Be a co sponsored with you thank you I'll take you up on that this bill has caused me to miss a few sermons I leaned over and in church and going to my husband what do you think about this is like you're not even paying attention this bill has brought a lot of of chasing rabbits and church so. Thank you representatives. Thank you Mr chairman I just this may be a question for DF in a but I noticed on here where it says the amount of the allowed income tax credit exceeds the taxpayer's income tax liability the XSL be refunded to the taxpayer on all the other bills we passed and you know I guess past session three before that is not the way the tax credits work for you get you get more back then the tax credit if your income is higher we're still working on that that's this is something that D. F. and nine polity and I still have to work on that's one reason I wanted to have them at the end of the table with me you're welcome to come down all into that question and that is something we normally do. Thank you Mr chair members of the committee Paul hearing department finance administration a representative these to your question the General Assembly does provide different types of tax credits. Within our law and the way that US house bill seventeen nineteen is is drafted it's a refundable tax credit so that the end the taxpayer that received the credit if their tax liability on the river return prior to application the credit is going to be less than for example the three thousand credit they would be refunded the access some of our tax credits are non refundable credits so that a non refundable credit can typically is allowed to carry forward into future tax years and it will have a a period of time that it will it has not yet been redeemed it will drop off and no longer be able to be used but the way some incentives in the form of tax credits are are provided and they are in order for the taxpayer to make sure that they're getting the full financial benefit of the credit the General Assembly provides that the tax credit would be fully refundable so that they claim the credit they get the full economic benefit of the credit. You get a representative. The representative group you have a question Sir. Yes Sir thank you Mister Kerr you're welcome I just like to say I think this is a great bill for someone who already does I work an alcohol drug reform and I have hired people like this there is nothing better to see them come back together and become a productive citizen come acted or family in the loyalty that you have from one of those employees that you help is tremendous and one thing I wanted to make sure we don't miss is and I think we've already hit on it is that if you keep them from going back from the recidivism the impact that the state gets from from the the revenue they get from the taxes they pay the lack of crime and everything else is it is great I think it's a great deal of the vehicle sponsor. Thank you Russian I just thank you. Thank you Mr chair I did go what rep just said this is something that's been due to my hard for many many years and met back up top to the Senate meetings with local employees in my district Jeff the to ask them about hiring felons and and what the policy wasn't all that for many years and it made them leeway but and I appreciate you bringing the fifth of legislation revenue lost from and I'd like to be on the code co founder only thing I regret that I'm not the sponsor of the bill. It. Consider it done thank you general questions. President Garner I just want to say one thing as as someone who spends a lot of time with housing for felons. This issue which it is we do hire felons and our restaurants and and and our businesses and. It would be so nice to have that benefits and and and recognition for for doing some of those kinds of things not not recognition for us but recognition that it can be done and that these people are the service second chance so thank you now it's my pleasure I don't I rent to felons yeah and I see the struggle that they have finding a job. Yeah. Thank you for your questions. Nobody else others will speak against the bill for the bill Clause rebuild them I appreciate all the support this is a pilot program I realize like starfish throwing them back in the ocean you can only do them one at a time we can't help all ten thousand we may only able to have fifty or a hundred I don't know where this will go but I do know with a lot of hard work in a big dream we can help a lot of folks thank you ma'am measure of progress fifteen minutes without one bill we got to get out today if the committee wants of the resolution can you do car bill pretty quick since you're not in the table. This members is gonna be house bill Fourteen thirty one. Colleagues representative Payton did an excellent job please don't tell him I said that I am on his car bill his went from seventy five hundred to ten thousand miles just a flat ten thousand it's expensive to buy a vehicle these days I'm not even sure ten thousand going to cover it I'm sure you've all gone to the car lot looked around ten thousand dollars barely buys you four wheels that go this way and one that goes this way so this is basically raising this to a decent semi decent level and with that I would appreciate a good vote we have eighty eight co sponsors and I'm glad that anybody else that I haven't run down the capital I'll be glad to add them to your committee questions. Thank you ma'am the effect you want we all know the impact so we're all good to go thank you thank you ma'am thank you colleagues all right to the members let's pick up house bill thirteen eighty five dot Johnson room buddy. Can you do this about ten ministers so unless you think. Okay all right. This recognises shall hear a representative Lee Johnson District seventy five. So committee members is a real straightforward simple bill and the state of Arkansas services provided are exempt from sales tax except as outlined in statute so in current statute if you provide janitorial services you have to collect and remit sales tax we we have the same cabbie out for lawn care and landscaping the differences we differentiate residential for commercial when it comes to lawn care so someone in your neighborhood most lines at your house they don't have to collect sales tax permit that we don't have the same differentiation for janitorial services so someone's in your neighborhood and your community and they're making their living by cleaning individual residential houses currently they're having to collect that sales tax permit it that that's quite a hardship on some of these folks that are just trying to make their live in a clean houses now if it's commercial that was or stored in this bill is for making that differentiation so we're saying look if you're doing residential janitorial services you're just cleaning it primary family's home you you'd be exempt for You were making that same differentiation after janitorial services as we already do for lawn care I don't have to try to answer any questions on that sure there was any questions. PolyOne give us the if a second. Thank you Mr chair Paul Gary with TFA idea if they provide the fiscal impact statement for house bill thirteen eighty five with the estimated effective date of October first of this year we would anticipate eight months of reduced sales tax collections which would result in approximately six hundred thousand dollars in reduce state sales tax. Two hundred thousand and city and county sales taxes for the full fiscal year impact in FY twenty three the estimated revenue loss would be nine hundred thousand dollars in state sales tax and three hundred thousand in local sales taxes be happy to answer any questions about the fiscal impact statement thank you members of any questions. Thank Paul thank you good thank you. Nobody else to speak against the bill for the bill. President Johnson close rebuilder yes committee members and that this doesn't seem like much of an impact on that I think that's important I mean I think that for the folks are out there trying to do the right thing this really is a hardship for them this doesn't have a big impact in general revenue but I think it will have a big impact on the people who are trying to do this the right way so you at appreciate your consideration as you're looking at these bills thank you thank you Sir appreciate combat thank you members last but not least will be Senate bill five twenty five this bill of committee so choose do will it out to committee the sponsor looks plain the reason why here shortly probably miles within the table also if you don't care please. Thank you Mr chair of the committee members this this bill is going to reverse what was done in the Act number eight nineteen at the two thousand nineteen session. That act basically switched the handling of franchise taxes To the Department of DF and a. it is been from the secretary of state's office and basically what this is the bill is doing is basically putting it back to the secretary of state's office Basically it's been determined that they've been compliance issues for the Arkansas taxpayers so they want to return it back to what it was so. That's it in a nutshell thank you Paul your come up and. Give. The governor's official stance. Yes thank you Mr chair Paul gearing with the FAA as a part of active nineteen of two thousand and nineteen franchise tax was scheduled to be transferred from the secretary of state to the department of finance administration effective may first of two thousand twenty one we worked very closely with the Secretary state since the Act of nineteen became effective to work through all of the issues to incorporate franchise tax into our current tax system. And then also we would be entered into a memorandum of understanding with the secretary of state to take over the their duties as of January first of two thousand twenty one. Now as more there are as over two hundred thousand active accounts that we receive from the office of the Secretary of State our system in order for taxpayer to get registered to report within our a tap system is a as as a system that's more has a much greater level of security and control than what was currently on the platform for the secretary of state we had some issues with taxpayers contacting us saying this is taking far too much longer than what we would anticipate to do to report our franchise tax we had tax repairs telling us well I'm only charging the small amount of feed to do this task for my client but now it's taking so much more time this is going to be much more expensive process so we had a number of meetings to figure out what to do and then the judge in those meetings it was determined that the franchise tax could be taken back over by the Secretary of State on or about March the fifteenth of and they can resume their all normal operations that has been done this bill essentially would NO a five the after the provisions of act eight nineteen so that no longer would franchise tax be officially transferred over to DFA as of may one of twenty one our chief concern with this process is we did not want the reporting of franchise tax to be more cumbersome a more time consuming and more complicated than it needed to be and certainly this bill would accomplish that this would require through the status quo and then allow us to figure out going forward that the best possible solution for where friend franchise tax is going to continue to be administered at the Secretary of State or some other way to have been brought over to DFA in a way that would not be is cumbersome as of what we are receiving the complaints on be happy to answer any questions thank you Sir the questions reserve member recognized bill. Thank you Mr chair at lots of back and forth I'm just curious how old communicating how you are communicating that to the taxpayers to to know how to pay that franchise tax that they're gonna be confused for all this just what's the communication there there was a part of a robust communications effort earlier this month to make sure that individuals were aware we had process the number of returns on our a tap system within DFA but certainly that the the farm Jordy of returns that we're going to be processed we would anticipate we're going to go through franchise tax through the for Secretary of State's platform because they're not due until may the first of this year but certainly the that the number of calls that have come in regarding this issue have have decreased because of that public information campaign so it looks like for the time being the the situation has been resolved by transferring it back in the if they no longer administering it for this current tax filing year. Thank you rest of Westerman could. Thank you Mr chairman of Paul referred fresh bottled memory winery infinite wisdom did we think we need to change this in two thousand nineteen there must have been a reason at thank you representative Fortner there as a part of that tax reform and relief task force they were a number of recommendations that task force met beginning in the summer of two thousand and seventeen and then met continuously through the run up to the two thousand nineteen session there were a number of proposals that the task force had this was one of the proposals and it makes a great deal of sense DFA administers. Income tax sales tax a number of excise taxes such as motor fuels It makes sense for that for those taxes to be within the DFA umbrella but certainly for those individuals that we're having the problems with registering for a tap account and also paying through the through our platform where they were experiencing being able to go to the franchise tax platform with the Secretary of State. in being able to do what they need to do very quickly we did not want to make any of the this process more difficult for those taxpayers but certainly that the push to bring it over to DFA was because DFA administers. The the far majority of the taxes that are administered under state law thank you and you said task force that explained. We'll this also goes back to some folks in the Senate vote car wash bills really good to us as. General questions. Those stark as members reading get that. And any other questions but others will speak against the bill for the bill. Represent. The Bill Cosby Bill. Yes Sir Mr chairman I am so glad that Paul was here to feel like you just repeated me I'm really glad he was here to fill in the gaps well we're glad he was there to just kind of clean you up that's right so I would to ask for a do pass please thank you have a motion to pass any debate all in favor say aye aye aye opposed relates to pass the bill thank you. The members good work great work thank god but ten minutes to spare here just wanna say thank you to the staff the really hustle around hard to get make this thing work under trying to bills printed out all that so we'll come back next Tuesday I'll text out the bills are you guys ready to your to bills next Tuesday by chance okay so those two bills members of the we have a ten thirty five ten forty three we run those two bills for sure nobody's of we'll talk to doctors for the rest of the bill give a step beyond agenda in back anything that. President you gases means during.