Revenue & Tax - Senate
Video
Transcript
1 document
Bills discussed (2)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
|
SB10
· 5 mentions in chapter, agenda, transcript
Matched: “SB10 D. Wallace TO CREATE THE WORKING TAXPAYER RELIEF ACT.”
|
TO CREATE THE WORKING TAXPAYER RELIEF ACT. | D. Wallace | Died in Senate Committee at Sine Die adjournment. |
|
SB26
Act 915
· 3 mentions in chapter, transcript
Matched: “SB26 J. Sturch TO AMEND THE LAW CONCERNING THE REDUCED SALES AND…”
|
TO AMEND THE LAW CONCERNING THE REDUCED SALES AND USE TAX RATE FOR UTILITIES USED … | J. Sturch | Notification that SB26 is now Act 915 |
Machine transcript
May contain errors. Verify important quotations against the official video.
About transcript accuracy
- Source
- Whisper
- Model
- ggml-large-v3-turbo.bin RTX5060
- Processing date
- October 6, 2026
Senator Bill Sample
Unverified
0:00
I'll call this Revenue and Tax Committee together. Senator Diswain, do you
have anything you want to share with the committee? Well, if not, we will move right along into Senate Bill SB10. Senator Dave Wallace, I know you're here. There you are. If you and your guests would take a seat at the table.
Speaker 5
0:35
Sergeant, would you close those doors? Close those doors.
Senator Bill Sample
Unverified
0:45
If you would, state your names for the
Annabeth Gorman
Unverified
0:50
record. Thank you, Mr. Chairman. Dave Wallace, District 22. Thank
Speaker 9
0:56
you, Mr. Chairman, my name is Annabeth Gorman, I'm with the Women's Foundation
Speaker 5
1:01
of Arkansas. Thank you. Senator Wallace, present your bill.
Annabeth Gorman
Unverified
1:04
Mr. Chairman, members, this is a really good bill.
It helps the working class of Arkansas. It, in a nutshell, gives back 10 percent of their taxes. It phases out. It matches pretty much what the federal earned income credit law does. A family of three, it will phase out in the vicinity of $57,000, and it just gives money
back to the folks that need it the most. As a good example, when you have waitresses working, it will give them back approximately $300,000. Senator Wallace, would you slide
Speaker 14
1:54
that up a little closer to your money? Yeah,
Annabeth Gorman
Unverified
1:57
I'll take this off also. All right. I'm sorry, Mr. Chairman. Waitresses, we'll get back. The waitresses making around $21,000 will give them back $300 a year. It allows somebody to pay for utilities for a month, maybe pay for their rent for a month.
And it goes to people that are working, not people that are not working. And with that, I'm going to let my expert tell you a little bit more about
Speaker 9
2:25
the bill. Good morning. Thank you for having me here this morning. My name is Annabeth and I'm the executive director of the Women's Foundation of Arkansas. I just want to talk a little bit quickly about myself my organization. I've spent the last decade working for women and girls across our state. Starting out I'm working for the Girl Scouts of Arkansas going to visit every single county in
our state meeting young ladies and their families. In the last five years I've been working for the Women's Foundation and we are the only statewide foundation, a philanthropic organization that does research and work on behalf of women and girls. And our particular interest is the economic development of women in our state. And so today I can speak to why Senate Bill 10 is so important and impactful for women in our state. And to do that I want to kind of paint a picture about some of the women that Senator Wallace has talked about.
If you're a single mother in our state and you're making state minimum wage, If you manage to hold down a 40-hour job at 52 weeks a year, you make approximately $20,000 to $23,000. That's if you don't take off a sick day, you don't miss work, you're there every single working day. Imagine if you have two kids. Where do you live? What are you feeding your kids? What kind of roof is over your head?
this bill is a simple bill it's a language that is short and simple and it replicates a program that our federal government already enacts but this would help this particular woman and her two children on that type of salary her benefit might be around five hundred dollars around tax season so again what is five hundred dollars to that family that's rent that is more than a month of groceries. This bill is designed to help, again, our working families. No, it's not gender
specific, but you need to think about who are the working poor in our state. One in six women in Arkansas live in poverty. Single heads of households, 44 percent live in poverty. Our children, our future, almost a third of all Arkansas children are living in poverty right now. to working working parents if anything the pandemic has taught us to appreciate our essential workers and this is exactly who this bill will help it's going to help our grocery
store clerks it's going to help our nursing aides it's going to help our school janitors it's going to help any individual that is vital to the infrastructure of our day-to-day lives in this state, and they're not making a lot of money. This bill phases out as your income grows, but it's something that our state can do right now in our power to help our working families, and the time
is now. Federal government has not changed their model in over 25 years. Several states have already adopted this model, and this is in our power to do it, and we should. We should and we can. With that, I'm happy to answer
Senator Jason Rapert
Unverified
5:51
Ryper, you have a question? Thank you very much. I appreciate, obviously, the bill and the opportunity to discuss it.
I saw the impact, I think it was $77 million, I believe, to general revenue.
What I'd be interested in is that, you know, just as this legislature is continuing to look at things that we can do to help our
citizens. Do you happen to know, and I'm going to, I'm assuming you probably do, and if it could provide it to me if it's possible, do you happen to have any numbers on all of the tax cuts that we've put in place over the past 10 years here, as well as at the federal level, that has positively affected those workers? Because, you know, we had, I think, the largest
tax cut reform in the nation's history was passed at the federal level, which they thought never could happen, and it did during the last administration. And then we have passed significant, I think the number now is approaching $800 million in total tax cuts that we've been allowed to do here over the past 10 years. The sales tax reduction on groceries, which was done, I believe it was in 2013 when we did that, which was $65 million a year in pockets.
I just wondered, is there information like that available? Because obviously you hear, well, that did not affect me or I did not benefit from that. Is that something you have sort of in your pocket already as a resource or is it something you've considered? I don't have that information in my
Speaker 23
7:31
pocket today. But I can say that, you know, who says they're not being impacted?
Speaker 9
7:38
If it's a family that's struggling, of course, they're always going to say they're not being impacted.
And you and I know, too, there's been massive tax reform. I know that we could probably work to get you some more information in particular, how that's trickled down to our state and benefited, you know, individuals living in our state. But I would say from the perspective of an individual living in poverty, you know, $500. dollars, again, the example that I gave you is still going to
Senator Jason Rapert
Unverified
8:07
be very impactful for them. Well, I just
think it would be interesting, and it's just interesting on a macro scale for all of us to consider as we're considering all these bills. But I know that, you know, I'll just say
in closing on that, as much as I'd like to continue to do things, and we have in mind some things that we're going to be doing, as a financial advisor, the professional background I've got, folks that I served have never had a time where the tax rates have been more favorable than right now where they're at, especially when you relate to capital gains taxes and that sort of thing. So I appreciate bringing the discussion up. I do feel for families that are struggling and hopefully one of these days Arkansas can join the ranks of some of our surrounding states and
redo our entire tax scheme so that maybe folks like that aren't harmed as much. So thank you very much. Are there other
Senator Jimmy Hickey, Jr
Unverified
9:11
questions? Senator Hickey? Yes, Senator Wallace and you too, ma'am, if you don't mind. I hear what you all are saying about the working class and things of that nature, but and now this is probably 30 years ago, but I remember during the when I was in banking,
You know, what I would see sometimes with that, that you would have businesses that would maybe use the depreciation or 179 calculations to cram down their income and that years ago that those possibly could be used, they would get the credit also. Is there anything within this bill that allows that type of situation from happening, or would those same businesses, if they're able to cram down $100,000 of their income,
are they going to be able to get the credit also? Whenever I say businesses, it may be a self-employed individual. Have we looked at
Speaker 32
10:03
that? There's nothing in this bill that covers that, Senator Hickey. That prohibits it? I'm sorry,
Annabeth Gorman
Unverified
10:09
Senator Wallace. I said there's nothing in this bill that I'm aware of that program. There's nothing in this bill I believe that covers that. Okay. So in other words,
Speaker 32
10:20
that possibly could be allowed. We haven't exempted that. Okay. There are studies that have shown too that
Speaker 9
10:29
the concerns raised about fraud or incorrect use, the individuals enacting that aren't individuals that have relationships with financial advisors or professional services firms like a CPA. I'm married to a CPA, and those that take advantage are individuals that this bill is not designed to help. Okay. May I continue, Mr.
Senator Jimmy Hickey, Jr
Unverified
10:51
Chair? Continue. Because I did notice, and
I knew Senator Rayford had brought up the fiscal impact,
but I do notice, like in the other comment down here on the fiscal impact, It says that the IRS estimates 25.3% of the total EITC payments or have some type of fraud involved with those. So that is a large number, it would
Annabeth Gorman
Unverified
11:15
seem like. Thank you, sir. And if I may speak on that, in the past, and I have spent my second career in staffing, working with folks that don't make a lot of money.
And I have seen EIC fraud in the past, and for me, it usually centered around those that worked very seldom, and it was not folks that were in this category that worked literally every day and just, by circumstance, did not have a job where it paid much above minimum or in this case even a fairly decent job, $15 or $16 an hour.
The key parts of this is the cost is steep, it's $77 million, but it affects roughly 9% of folks from Arkansas that are working, every day working, trying to make a living. It doesn't affect anybody not working, but it aimed right at the folks on that lower level of the scale, working every day, trying to put a roof over their heads.
And with that, Mr. Chairman, I am closed unless there's further questions. I have
Senator Larry Teague
Unverified
12:42
a question for Senator Teague. Thank you, Mr. Chairman. Do we know what the average payment is to people of earned income tax
Speaker 9
12:50
credit? Is it all the same? It varies by your income, by your marital status. number of dependents that you have. Do
Senator Larry Teague
Unverified
12:57
we know how many people receive it now, earned income tax
Speaker 9
13:02
credit? Well, it's enacted again at the federal level already,
so and I don't have that number right
Senator Larry Teague
Unverified
13:09
in front of me. I didn't see it in here either. It just
Senator Bill Sample
Unverified
13:17
says 77 million. And he's coming up to the
Speaker 48
13:20
table next, Senator Teague. Sir, okay, all right, thank
Senator Bill Sample
Unverified
13:24
you. Thank you, Mr. Chairman. You're welcome. And before you close, I have Paul Gehring to come up and present the F&A site. Mr. Gehring.
Speaker 52
13:41
If y'all will. If you would, state your name for the record. Thank you, Mr. Chair. Paul Goering, Arkansas Department of Finance Administration. Go ahead. Thank you, Mr. Chair. DFA
Senator Lance Eads
Unverified
14:09
did prepare a fiscal impact statement with regards
to Senate Bill 10 of 77 million dollars. As noted in the revenue impact, we would anticipate approximately 289,000 Arkansas taxpayers would receive the benefit of this credit as contemplated in Senate Bill 10. The governor has certainly targeted a lot of tax cuts in the past to our middle and lower income taxpayers in Arkansas. The revenue impact, however, in Senate Bill 10 is higher than the anticipated or targeted level
of tax reductions that the governor has announced for this particular legislative session. And as noted in the revenue impact, there are concerns administratively on DFA side about the level of fraud that the IRS
Speaker 52
14:59
has reported with regard to the EITC. I would be happy to answer
Speaker 53
15:03
any questions of the committee. And the fraud
Senator Bill Sample
Unverified
15:07
is in the last paragraph about other
Senator Lance Eads
Unverified
15:10
comments, is that correct? That's correct. In our other comments, according to the IRS, the IRS is estimating that 25.3%
of the EITC payments arising on the federal level in fiscal year 2019 were improper. Now, certainly there are approximately 75% of legitimate taxpayers that are not identified as fraudulent EITC filers, but certainly the IRS has recognized the problem with the EITC with regards to the level of fraud.
Speaker 41
15:43
Are there questions for Mr. Gehrig? Senator Teague.
Senator Larry Teague
Unverified
15:49
Thank you, Mr. Chairman. If I divide the $289,000 into the $77.23 million, that's a $267, roughly, credit average, on average. And this part down here at the bottom, where you're talking about the feds estimating 25.3%, of total claims were improper. I guess that's countrywide. And it says that we
might, people might file paper ones. I'm not sure I understand. Extra paper ones or just.
Senator Lance Eads
Unverified
16:21
Thank you, Senator Teague. With regards to fraudulent returns, quite often fraudulent returns are, in fact, filed on paper in order to hope that either the state or the federal government will process those returns without the information reported on the return being able to go through its own internal fraud checks. So certainly that is what we have seen and the IRS has seen in practice is that the fraud rate,
the individuals that do file fraudulent returns tend to utilize the paper returns as opposed to electronic filing. But I do want to make it very clear, not just because someone has filed a paper return does not per se make that a suspect return. Just from what we have seen in terms of the fraudulent returns, they tend to be, many of them are filed on paper. Thank you,
Speaker 64
17:18
Mr. Chair. Thank you. Senator Ingram. A couple of questions, if I might, Mr. Chair, for Mr. Gehring. I have seen some, the IRS on the 25%,
I've seen some other publications that dispute that about what they're counting as fraud that things that are mailed to wrong addresses are considered fraud and there was no money that was involved. So that's one thing. Paul, sort of tell us functionally how this would work on our returns now. Does that EITC show up on our returns that it's filled in? How do we track, if we're going to use the federal government, how do we track this?
Senator Lance Eads
Unverified
18:00
Well, certainly, Senator Ingram, when an individual would file their federal return and claim the EITC, this would be a calculation of a percentage of 10% of whatever was claimed on their federal return, so that taxpayer on their Arkansas return would have essentially a line for a refundable tax credit, which would be 10% of the federal EITC, but of course that would be subject to both audit by our auditors within the Individual Income Tax
Section of DFA, but also if a return was filed on the federal side that had been later disallowed by the IRS, we would get a report of that from the IRS at a later date on the routine data that we receive for federal corrections. And
Speaker 64
18:56
so that's how we would administer, they wouldn't send anything to the state other
Speaker 68
19:02
than the federal, I mean the federal, that's how we would administer it by that.
Speaker 70
19:08
Okay, thank you. Are there other questions? Senator,
Senator Jonathan Dismang
Unverified
19:18
just mine. So it's really for Senator Wallace, where do we come up with the 10%? Because federal tax law and IRS tax law is more and more out of compliance with each other. Compliance, what I mean is they differ substantially at this point. Where do we come up with the 10% and why wouldn't we tie it back to, or what was the thought process there?
Annabeth Gorman
Unverified
19:42
I'm going to need to ask my expert to come up and answer that one. I don't have that answer.
Speaker 9
20:18
again, please. Annabeth Gorman. Sorry, sir. It was a good place to start. The 10% was a good place to start and again, mimicking other states and other examples. Okay.
Senator Jonathan Dismang
Unverified
20:28
All right. Thank you. Are those other states then, do they have conformity in place so that it kind of makes sense as these things track through or are you aware? I'm not aware. On the 10%. Okay. All right. Thanks.
Speaker 28
20:42
Are there other questions? Senator Wallace, you would like to close
Senator Bill Sample
Unverified
20:51
for your bill? Sir, I am closed. You are closed. Senator, you do realize that we're not taking votes on any of the bills that come through. And so
when we get ready to take and get a little nearer, we will call you back and your bill will be voted upon. Yes, sir,
Annabeth Gorman
Unverified
21:06
Mr. Chairman. Thank you for your time. Thank you, ma'am.
Speaker 28
21:12
Senator Sturge, would your guests like to?
Speaker 63
21:42
Senator Sturge, you're here to present Senate Bill 26, correct? Yes, sir, I am. If you would, state your name
Speaker 85
22:00
for record. James Sturge, State Senator,
Jerry Mcchesney
Unverified
22:04
District 19. And if you're guessed. Gary. Gary McChesney, Fuchery Fuel Chemical
Speaker 88
22:10
Company, Batesville, Arkansas. Okay, thank you. Senator Search, you've got the floor.
Senator James Sturch
Unverified
22:14
Thank you, Mr. Chairman. Thank you, colleagues. I bring before you Senate Bill 26 for your consideration this morning. It's basically expanding what we've done. About eight years ago, we decided to put some tax exemptions on utilities that were used directly in manufacturing, electricity, natural gas, and so forth. I'm just asking that we add coal to that list. Future Fuel Chemical Company in Batesville is the one that brought this to me, to my attention based on some tax issues that they had had where they were using a combination of coal and some of these other utilities in their manufacturing.
And, of course, then DF&A came back and said, well, you can do this, but you can't do this. So I'm just asking that we add coal as part of this exemption. Of course, you're well aware of that the reason we did this, being pushed by employers in our districts and chambers of commerce and so forth, we were trying to limit the tax and are being double taxed on things that were being produced right here in Arkansas. So with that, Mr. Chairman, if you don't mind, I'll let Mr. McChesney take it from here.
Jerry Mcchesney
Unverified
23:20
First of all, I thank you, Chairman Sample, members of your committee for considering SB26 and allowing me to come and speak with you today. As I said, my name is Jerry McChesney. I'm the Chief Technology Officer at Future Fuel Chemical Company. Future Fuel manufacturers specialty chemicals in Biodiesel, Independence County near Batesville, use coal, natural gas, electricity to power our manufacturing operations. Our primary focus for being here today is competitiveness.
Competitiveness from a regional, national, and global perspective. Employees of Future Fuel Chemical Company compete in all three arenas every day. Got some examples I'd like to share about how they illustrate the competitive situations we face. Over the past 13 months, we lost two long-term customers that failed to renew their contracts with us. In the first case, the customer took the product
back into one of their plants in another state. In the second instance, the customer outsourced their product to India. that the product we were once making in Basel, Arkansas and shipping to Missouri to be finished is now shipping from India to Missouri to be finished. Both these products are used to make herbicides that are widely used by farmers across the country and Arkansas.
More recently, we were working with multiple companies to look at how we can bring products are currently offshored back into the country from countries like China, India. We are focusing on agricultural and pharmaceutical related chemicals. These type of specialty chemicals have our vital natural interest to the United States from both a physical standpoint,
from an economic standpoint, and national security standpoint. More recently, we lost a bid to another Indian company to make a polymer that goes into high-speed printed circuit boards. Circuit boards that have applications in 5G cellular networks and high-speed servers. here are just some of the examples that we've experienced in just the last 13 or 14 months
of losing business to other states and other countries due to pricing current state law puts manufacturers that use energy at a disadvantage use coal as energy as a disadvantage to those that use natural gas and electricity in arkansas natural gas and electricity enjoy reduced sales tax rate when used in manufacturing, while coal does not. Our research indicates that Missouri, Tennessee, Mississippi, Louisiana, Texas, and Oklahoma
all have full or partial sales tax exemptions for coal used in manufacturing operations. SB 26 would eliminate this regional and national disadvantage while increasing our competitors on a global basis. to future fuel sp26 is an important step in improving our competitive position and that is the reason i'm here today the sales tax benefit provided by sp26 will pay for the first four hourly employees that
we hire once the legislation goes into effect i just want to point out for the last 40 years future fuel has been an economic engine for independence county and surrounding counties We currently employ 470 people with annual payroll of $32 million. The average hourly employee at Future Fuel makes $56,000 a year. Average professional employee at Future Fuel makes $84,000 a year. We regularly invest in new plant and equipment.
In 2017, 18, 19, we invested $15.5 million in new plant and equipment. In 2017, 18, 19, we paid a combined total of $3.9 million in sales, use, and motor fuel taxes, and $900,000 in income taxes. And in closing, I just, we respectfully request that the committee approve passage of SB 26 to provide, to place coal on equal footing
Speaker 90
28:06
with natural gas and electricity for manufacturing use in Arkansas as it is in the surrounding states.
Speaker 91
28:14
So thank you. Senator Caldwell, you have
Senator Ronald Caldwell
Unverified
28:18
a question? Thank you, Mr. Chair. If this bill passes, how much financial impact directly on your company will this have? In other words, how much are y'all paying on sales tax on coal?
Speaker 93
28:30
No, it'd be $200,000 to $250,000 a year.
Speaker 64
28:37
Thank you, Senator Ingram. So coal's about one-third of your utility cost? I don't know
Jerry Mcchesney
Unverified
28:44
the exact percentage. It changes as a unit price for natural gas and coal change, so we balance taking the minimum cost. But that's a good assumption. It varies from
Senator Larry Teague
Unverified
28:58
year to year. Senator Teague. Would you answer Senator Caldwell's question again? How much money would you save from this? Would the company itself save?
Speaker 94
29:07
we would pay $200,000 to $250,000 less in sales tax. Well, I don't understand how it
Senator Larry Teague
Unverified
29:19
could cost us $826,000. Senator Teague, I think I can take a stab at that. So $537,000 is the
Senator James Sturch
Unverified
29:28
state portion, and then you add more then for the local portion as well. So when we did our research, there was only a handful of these companies
that actually used coal directly in manufacturing in Arkansas. And so across the state then, $537,000 lost to the state or 800 and some odd thousand then across, you know, for local and sales tax. So when we did our, you know, initial research with DF&A and so forth, I was surprised that, you know, the way that they're coding it, it's already in the federal law and federal tax code as far as what they can code for manufacturing use. We're not talking about coal for electric generation or anything like that,
but just this one specific federal code, coal for manufacturing. That's why that number is so low. Where do
Speaker 99
30:20
you buy your coal? Currently, it comes from Illinois. Illinois.
Speaker 91
30:27
Thank you, Mr. Chairman. Thank you. Senator
Senator Jason Rapert
Unverified
30:30
Rayford, do you have a question? Thank you, Mr. Chairman. You actually spoke to this just now, but it didn't give me the full answer. And my question was on the electric generation.
I just want you to clarify, you said that's not affected. So my question is, are they already exempted, or would this not affect them? I
Senator Bill Sample
Unverified
30:53
can answer that. The bill that he's tinkering with was my legislation, I think, 214. I think they are exempt. So
Senator Jason Rapert
Unverified
31:02
they're already exempt. That was my question. So in other words, would it be fair to say that the only entities that are heavy users of coal
that are not already enjoying some exemption would be this particular class under the bill? Is that correct? Okay. Thank you. Thank you.
Senator Jimmy Hickey, Jr
Unverified
31:25
Senator Hickey. This leads me, and I believe that's on page 2, lines 21 through 23. So we've got natural gas, electricity, and we're trying to add the coal. Whenever you happened to be looking at that, as far as these type of utilities, was there anything else that possibly should be exempted, too?
I mean, I hate to even bring that up, but propane comes to mind or something, or some of our businesses using that. Thank you, Senator
Senator James Sturch
Unverified
31:56
Hickey, for the question. So that's what's coming. And so I've had propane, you know, a dealer in my area to reach out to me asking if we could add propane to it. But when I went to the association and asked, can you tell me if any of your contracts or any of your major business dealers that actually use it for manufacturing,
they couldn't come up with any. So I've already asked DF&A, I didn't amend the bill just yet, but I've already asked DF&A for fiscal impact on whether we add LP to this list. if it's negligible I'd be happy to go ahead and add it you know I don't really think you're going to find a huge impact on
Speaker 104
32:30
the budget or anything like that but it is it's it is on my radar I don't
Senator Jimmy Hickey, Jr
Unverified
32:37
I don't know if there's anything else I mean I'm sitting here trying to struggle I
mean pellets or wood or I mean I've just I don't know so maybe I guess maybe that
was Sandra Sample at the time whenever you did this I mean I guess that was the majority of everything
Senator Bill Sample
Unverified
32:54
that was being used but we didn't look at LP normally manufacturers locate their
businesses near if they're using some sort of gas near a natural gas pipeline and so I don't know of any manufacturer right now just off the top of my head that uses LP for manufacturing Thank You Senator. Senator Caldwell. Thank you Mr.
Senator Ronald Caldwell
Unverified
33:20
Chair would make a comment on it that I've
heard rumors of Bill coming down on using LP for running irrigation wells that may be coming up it's not manufactured but other fuels are exempt from sales tax in the farming industry and so they're looking at that. We'll just give
Senator Bill Sample
Unverified
33:43
you an idea. Thank you, Mr. Chair. Thank you.
And my bill was mainly due to the running of electrical generation. So, are there other questions?
Senator Mark Johnson
Unverified
34:00
Senator Johnson. Thank you, Mr. Chairman. I'm trying to get clear in my mind the differential between utility and other uses of the coal. Is your coal that you consume used strictly for cogeneration or some other process that turns the energy in the coal into something to, for example, heat for transestrification of your source for your biodiesel
or something like that? or is it consumed, meaning like coking coal would be in a steel operation? I'm just trying to differentiate between those.
Jerry Mcchesney
Unverified
34:47
Use coal for thermal energy. So we fire boilers, we coal, make steam, use the steam to heat our chemical manufacturing processes. So it's the
Senator Mark Johnson
Unverified
34:57
heat as opposed to a steam generator, for example. It's actually... We
Jerry Mcchesney
Unverified
35:02
actually produce 600-pound pressure of steam.
and use that in heat exchangers
Speaker 90
35:08
to heat chemical manufacturing processes. We do
Speaker 110
35:13
not generate electricity. That does answer my question.
Speaker 5
35:19
Thank you, sir. Thank you, Mr. Chair. Question. Seeing no other questions, we have Mr. Paul Gehring to speak against the bill, if you would.
Senator Lance Eads
Unverified
35:35
Paul Goering, Arkansas DFA. Thank you. Thank you, Mr. Chair, members of the committee. DFA did prepare a fiscal impact statement for Senate Bill 26. The FY2022 revenue impact represents eight months of reduced tax collection
for $537,000 in state sales and use tax. And FY23 represents 12 months of collections for a total of $826,000 in lost state sales and use tax. Now, as I was reviewing the fiscal impact statement in anticipation of this morning's meeting, again, I reread the bill. I believe that we do need to amend this revenue impact because as noted in the revenue impact there we had reported a loss to local city and county sales and use tax but as I reread the bill
I think that this would continue to be subject to the constitutional levies in the Arkansas Constitution as well as the city and county so I'm going to go back to the excise tax section just in for purposes of full disclosure we want to make sure that this is correct and if there is a reason why they had reported a local tax loss. We want to make sure that we understand why. But I did notice that this morning right before this committee, so I did want to make that clear that we need to go back and verify the local sales tax loss. But I would be happy to answer any questions.
Speaker 41
37:15
Are there questions for Mr. Gehring? Senator Johnson. Thank you, Mr.
Senator Mark Johnson
Unverified
37:23
Chairman. Mr. Gehring, does this have any impact on the streamlined sales tax agreement? Thank you,
Speaker 52
37:28
Senator Johnson. We did review this bill for purposes of any streamlined issues. We did not see any SSTA issues. Okay, but the
Speaker 105
37:36
numbers we're looking at here on the green sheet are for eight months. So we'd need to add
Senator Mark Johnson
Unverified
37:44
another 50% to that to kind of come up with what an annualized amount would be.
Would that be close to correct? Eight months, so add four months. So take about half of that figure and add that in. Again, I realize you're talking about a limited number of taxpayers, so you can't absolutely extrapolate the average, but is my math okay on that? Yeah, your math is,
Senator Lance Eads
Unverified
38:08
and on the streamline issue, this tax change does begin on the first day of a calendar quarter, which would be October 1 of 21, which would be compliant with the streamline agreement.
Because it's effective after the beginning of the fiscal year, we would only have eight months of collections. The FY23 revenue impact represents a full year of state sales and use tax collections, which would be the $826,000. Plus the locals. Plus the locals, but as I reread this this morning, of course, we want to make sure that this is correct. I reread the bill. It appears as though the locals would be unaffected. But if that is, I want to verify that with excise taxes.
It does not appear that the locals would be affected. The law does not appear to be impacted. as with regards to the local sales tax. Okay.
Speaker 111
38:58
Thank you, Mr. Gehring. Thank you, Mr. Chair.
Senator Bill Sample
Unverified
39:01
Are there other questions for Mr. Gehring? Seeing none. Senator
Speaker 91
39:09
Starcher, you ready to close for your bill? Thank
Senator James Sturch
Unverified
39:12
you, Mr. Chairman. I just appreciate your consideration. I don't come before this committee very often, and so any time that I look at a tax bill
or a request such as this, I look at it almost like an investment strategy. If we were to take a loss to the state, how will that money be reinvested in personnel and salaries and helping our local communities? So I just appreciate your consideration. Thank you,
Senator Bill Sample
Unverified
39:33
sir. Thank you, and you are aware of the policy of the committee. Okay,
Speaker 18
39:39
seeing no other business, Senator Disman. Thank you, Mr. Chairman. Members, so
Senator Jonathan Dismang
Unverified
39:44
I've not had to do this before, but I do need to make a disclosure. I filed it with the committee, and it's related to House Bill 1229.
That is Representative Bentley's bill. It's co-sponsored by Senator Stubblefield here. It has to do with the sale of tax-delinkable properties in the state and allowing for an online auction. I have a fairly, and so full disclosure, I work for a company called Ryewell. I receive a salary from Ryewell, and they do buy and sell tax-delinkable property. I receive no commission or, you know, that process doesn't have the impact on my direct pay. But again, I want to have disclosure on that.
And then also I will be visiting with you at the right time to have a conversation of how I believe this bill would play out in the real world. But with that, I just wanted to make that disclosure before I started having conversations with the members. Thank you.
Senator Bill Sample
Unverified
40:41
Thank you for your disclosure. Members, if you will, keep a check on the agenda. I'm not positive we have any bills coming up real soon, but keep an eye on it and we will let you know.
And with that, we are adjourned. You
Agenda
CALL TO ORDER -
SB10 D. Wallace TO CREATE THE WORKING TAXPAYER RELIEF ACT.
SB26 J. Sturch TO AMEND THE LAW CONCERNING THE REDUCED SALES AND USE TAX RATE FOR UTILITIES USED BY MANUFACTURERS; AND TO APPLY A REDUCED SALES AND USE TAX RATE TO SALES OF COAL FOR USE IN MANUFACTURING.
ADJOURNMENT
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — REVENUE & TAX - SENATE, Feb 1, 2021 | Agenda | 1 | Official source ↗ |
Speakers
Senator Bill Sample
Unverified
Speaker 5
Annabeth Gorman
Unverified
Speaker 9
Speaker 14
Speaker 18
Senator Jason Rapert
Unverified
Speaker 23
Senator Jimmy Hickey, Jr
Unverified
Speaker 32
Senator Larry Teague
Unverified
Speaker 48
Speaker 52
Senator Lance Eads
Unverified
Speaker 53
Speaker 41
Speaker 64
Speaker 68
Speaker 70
Senator Jonathan Dismang
Unverified
Speaker 63
Speaker 28
Speaker 85
Jerry Mcchesney
Unverified
Speaker 88
Senator James Sturch
Unverified
Speaker 90
Speaker 91
Senator Ronald Caldwell
Unverified
Speaker 93
Speaker 94
Speaker 99
Speaker 104
Senator Mark Johnson
Unverified
Speaker 110
Speaker 105
Speaker 111