Revenue & Taxation- House
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Transcript
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Bills discussed (15)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
|
HB1031
Act 143
· 4 mentions in agenda, chapter, transcript
Matched: “…SALES AND USE TAX EXEMPTION FOR SALES OF CERTAIN AIRCRAFT. HB1031 Jett TO REQUIRE THE ELECTRONIC FILING OF INCOME TAX RETURNS…”
|
TO REQUIRE THE ELECTRONIC FILING OF INCOME TAX RETURNS BY TAX PRACTITIONERS; AND TO AMEND … | Jett | Notification that HB1031 is now Act 143 |
|
HB1010
Act 142
· 3 mentions in chapter, agenda, transcript
Matched: “HB1010 Jett TO AMEND THE SALES AND USE TAX EXEMPTION FOR SALES OF…”
|
TO AMEND THE SALES AND USE TAX EXEMPTION FOR SALES OF CERTAIN AIRCRAFT. | Jett | Notification that HB1010 is now Act 142 |
|
HB1109
Act 86
· 3 mentions in chapter, agenda, transcript
Matched: “HB1109 Eubanks TO AMEND THE LAW CONCERNING THE DEPOSIT OF FUNDS BY…”
|
TO AMEND THE LAW CONCERNING THE DEPOSIT OF FUNDS BY THE UNCLAIMED PROPERTY ACT. | Eubanks | Notification that HB1109 is now Act 86 |
|
HB1030
· 2 mentions in agenda, chapter
Matched: “…ECLARE AN EMERGENCY. DEFERRED BILLS Number Sponsor Subtitle HB1030 Jett TO PREVENT UNEXPECTED REDUCTIONS IN REVENUES FROM THE…”
|
TO PREVENT UNEXPECTED REDUCTIONS IN REVENUES FROM THE WHOLESALE SALES TAXES ON MOTOR FUEL AND … | Jett | WITHDRAWN BY AUTHOR |
|
HB1034
Act 732
· 2 mentions in agenda, chapter
Matched: “…AW CONCERNING THE CALCULATION OF THE WHOLESALE SALES TAXES. HB1034 Jett TO AMEND THE EXCEPTIONS TO THE PROHIBITION AGAINST THE…”
|
TO AMEND THE EXCEPTIONS TO THE PROHIBITION AGAINST THE DISCLOSURE OF TAXPAYER INFORMATION; AND TO … | Beaty Jr. | Notification that HB1034 is now Act 732 |
|
HB1035
· 2 mentions in chapter, agenda
Matched: “HB1035 Jett TO ADOPT RECENT CHANGES TO THE INTERNAL REVENUE CODE.”
|
TO ADOPT RECENT CHANGES TO THE INTERNAL REVENUE CODE. | Beaty Jr. | Recommended for study in the Interim by Joint … |
|
HB1038
· 2 mentions in chapter, agenda
Matched: “HB1038 Jett TO CLARIFY THAT SALES TAX IS REQUIRED TO BE COLLECTED…”
|
TO CLARIFY THAT SALES TAX IS REQUIRED TO BE COLLECTED AND REMITTED ON DELIVERY CHARGES … | Jett | WITHDRAWN BY AUTHOR |
|
HB1043
Act 719
· 2 mentions in agenda, chapter
Matched: “…ON DELIVERY CHARGES FOR SALES BY A MARKETPLACE FACILITATOR. HB1043 Jett TO AUTHORIZE THE WAIVER OF CERTAIN AD VALOREM TAXES ON…”
|
TO AUTHORIZE THE WAIVER OF CERTAIN AD VALOREM TAXES ON UTILITIES AND CARRIERS; AND TO … | McClure | Notification that HB1043 is now Act 719 |
|
HB1046
· 2 mentions in agenda, chapter
Matched: “…T OF TAX IF A TAXPAYER FAILS OR REFUSES TO PROVIDE RECORDS. HB1046 Jett TO CLARIFY THE ABILITY OF LEGAL COUNSEL FOR THE SECRET…”
|
TO CLARIFY THE ABILITY OF LEGAL COUNSEL FOR THE SECRETARY OF THE DEPARTMENT OF FINANCE … | Jett | WITHDRAWN BY AUTHOR |
|
HB1047
· 2 mentions in chapter, agenda
Matched: “HB1047 Jett TO CLARIFY THAT A TAXPAYER'S AGENT MAY FILE A PROTEST…”
|
TO CLARIFY THAT A TAXPAYER'S AGENT MAY FILE A PROTEST ON BEHALF OF A TAXPAYER … | Jett | WITHDRAWN BY AUTHOR |
|
HB1048
Act 718
· 2 mentions in agenda, chapter
Matched: “…PERLY EXECUTED POWER OF ATTORNEY AT THE TIME OF THE FILING. HB1048 Jett TO AUTHORIZE THE OFFSET OF A TAX REFUND TOWARD A TAX D…”
|
TO AUTHORIZE THE OFFSET OF A TAX REFUND TOWARD A TAX DELINQUENCY WHEN A FINAL … | Milligan | Notification that HB1048 is now Act 718 |
|
HB1049
Act 283
· 2 mentions in agenda, chapter
Matched: “…DELINQUENCY WHEN A FINAL ASSESSMENT OF TAX HAS BEEN ISSUED. HB1049 Jett TO ALLOW THE WITHHOLDING OF STATE INCOME TAX FROM UNEM…”
|
TO ALLOW THE WITHHOLDING OF STATE INCOME TAX FROM UNEMPLOYMENT COMPENSATION BENEFITS AND UNEMPLOYMENT INSURANCE … | Jett | Notification that HB1049 is now Act 283 |
|
HB1050
· 2 mentions in agenda, chapter
Matched: “…TIONERS; AND TO AMEND THE LAW CONCERNING TAX PRACTITIONERS. HB1050 Jett TO REDUCE THE NUMBER OF EMPLOYEES REQUIRED TO MANDATE…”
|
TO REDUCE THE NUMBER OF EMPLOYEES REQUIRED TO MANDATE THE ELECTRONIC FILING OF ANNUAL WITHHOLDING … | Jett | Died in House at Sine Die Adjournment |
|
HB1044
· 1 mention in agenda
Matched: “…estrictions designating areas as 'Members and Staff Only'. HB1044 Jett TO AUTHORIZE THE ESTIMATED ASSESSMENT OF TAX IF A TAXP…”
|
TO AUTHORIZE THE ESTIMATED ASSESSMENT OF TAX IF A TAXPAYER FAILS OR REFUSES TO PROVIDE … | Jett | Died in House at Sine Die Adjournment |
|
HB1158
Act 224
· 1 mention in chapter
Matched: “HB1158 M. Gray CONCERNING THE PRISON CONSTRUCTION TRUST FUND; AND…”
|
CONCERNING THE PRISON CONSTRUCTION TRUST FUND; AND TO DECLARE AN EMERGENCY. | M. Gray | Notification that HB1158 is now Act 224 |
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Representative Joe Jett
Unverified
0:00
Representative Warren, you want to first present, sir? Hey, members, we're going to take a look at, without objection, we're going to take things a little bit out of order. House Bill 1109 is the first one we're going to take. And actually, this is Representative Eubanks is the main sponsor of this bill, but he's tied up. So Representative Warren graciously decided to try to kill this bill at the end of the table for him. Thank you, Mr. Chairman. Yeah, no problem, buddy. Best of luck to you. When you get ready, you got everybody down in your knee?
Representative Les Warren
Unverified
0:32
I think so. We have one more that can come up
if necessary. Okay. Just go ahead and start when you get ready. Thank you, Mr. Chair, committee members. What this is is Auditor of the State has unclaimed property monies that are sitting there or have been sitting there for a period of three years. Feel free to correct me if I get off base here. Uh, annually, we look at any funds that need to be, uh, moved over to general revenue for the state. Basically, uh, I would use the term as sheeted to the state.
So this is the, uh, time that we're doing that, uh, instead of a formula, we're using a set amount, 18 million, or the amount of funds that are sitting, have been sitting there for three years that are being recommended to be transferred over to general revenue for the state. So I will let you, if you would, go ahead and introduce yourself if the chairman so chooses and make any further explanations. Yes, sir. Please introduce yourself for the district.
Speaker 6
1:35
Yeah. Good afternoon. I'm Scott Covert. I'm the chief deputy auditor for Auditor of State Andrea Lee. This is an agreed upon bill with DF&A. We're just identifying $18 million as the dollar amount that we will transfer to general revenue once per year. Okay, members, you had an explanation of the bill. Is there
Representative Joe Jett
Unverified
1:53
any questions? Anybody already signed up to speak against the bill, for the bill? Representative Warren, you close for your bill, sir? I am. I would ask for a due pass.
Okay, members, we have a motion for a due pass. Any debate? All in favor, say aye. Aye. Opposed? Congratulations, sir. You did not mess Eubanks' bill up. Thank you so much. I appreciate that opportunity. Not as much as
Representative Les Warren
Unverified
2:16
he does. Representative Gray, are you in the room, ma'am? Yes.
Representative Joe Jett
Unverified
2:21
Are you ready to go? Thank you. When you get ready, just... Do you need somebody at the end of the table? Oh, you got Mr. Graves?
Y'all, please recognize yourself. When you get ready to
Representative Michelle Gray
Unverified
2:41
start, just go ahead, ma'am. Thank you, Mr. Chair. I've got Secretary
Graves. here with me, and I will go ahead and I'll kind of start to explain this. Does not like this mic. All right. So we've got, and I'll probably butcher this, just something terrible, but concerning the prison construction trust fund, currently in the trust fund, the way it's set up is that all monies have to be used for essentially construction. And so what we're
proposing is that the monies be allowed to be used not only for construction, but acquisition. because a lot of times you can buy facilities much cheaper than you can actually construct facilities. So this would allow for that. And then also it adds that all funds shall be segregated held, and then we added language upon the review and approval of the Secretary of Department of Corrections in here as well. And then we've just done some cleanup and changed Division of Correction to Department of Corrections.
So that's the very simplified version. I'd be glad to entertain any questions. And, Secretary Graves, you
Speaker 19
3:56
add? Representative Jed, the only thing I would add, just for the new members, whenever you renew your vehicle tags in the state, $1.50 of that goes into this fund. So this is funds that were designed for utilization by the Department of Corrections.
This bill just gives us additional options to use that $1.50 per tag that already comes to the department. Thank you, sir. I'm sorry.
Representative Michelle Gray
Unverified
4:25
Go ahead, ma'am. I've only had one. I had someone reach out to me literally about an hour ago through text, one opposition, and it was essentially saying they just wanted more time to look at it, And they were concerned about, you know, if we were to purchase the maintenance and operation and ongoing future. Well, that's something that whether they built or acquired or purchased, they would have to look at M&O for the future anyhow.
So that would be something they would have already planned out if they did proceed with this. So that's the only known opposition to this so far. Okay. Thank you, ma'am. I'm
Representative Joe Jett
Unverified
4:55
assuming if something got crazy between now and the Senate end, you take care of coming out on the Senate end? Oh, of course. Yes, sir. Okay. Thank you, ma'am. Members, any questions? Anybody in the audience want to speak against the bill, for the bill? Do we have a motion? Representative Lundstrom, motion do pass. I've got a question. I'm
sorry? I've got a question. I'm sorry. Let's back up. Representative Garner. Sorry.
Representative Denise Garner
Unverified
5:19
Sorry about that. I just had a couple of folks give me a call just to say that this does look like we're prioritizing purchasing new prisons as opposed to other services outside of the prison system or not outside of the prison system necessarily, but, and I get what you're saying, that you're using it for building or maintenance anyway, but is there a way to utilize those funds or find other funds for some of these other programs
that were already used, that are showing to be effective measures for actual rehab? have so um representative
Speaker 19
5:59
garner if you've got a copy of the uh bill in front of you and yes i was okay and my mind is going bad on me but if there is language in here that says that the funds are to be utilized for correction or prison facilities the way we have always considered
correction to be is an expansive term that is more than just prison, because the language is drafted in such a way where it is clearly intended to be a difference between the two. So this language would allow us to procure a treatment facility. It would allow us to procure a community correction center. It would allow us to procure a facility for use as a re-entry facility administered by the state instead of the current model that we have now,
which is contracts out to private vendors. This is more than just prisons.
Representative Monte Hodges
Unverified
7:06
Great. Thank you, Mr. Chair. Reverend Hodges. Thank you, Mr. Chair. This may be a juvenile question, but I see what you guys marked out, Division of Correction, and put Department of Correction.
Speaker 19
7:20
Why would that strike? So by putting Department of Corrections plural, which is the department's name post transformation, that allows utilization by either the Division of Correction, which was formerly the Arkansas Department of Correction singular, or the Division of Community Correction, which was formerly the Department of Community Correction.
That general department level term allows us to use it in service to either division instead of restrict it to just one division, which is currently the case. Thank you, sir. Okay, any more questions, members? Representative Lundson, you
Representative Joe Jett
Unverified
7:54
still have a motion on the table, ma'am? Do pass. I have a motion for do pass. Any debate? All in favor say aye. Aye. Opposed? Congratulations, ma'am. You passed your bill. Thank you, Mr. Chair. Colleagues? Members are going to do a little bit of switching up. My vice chair is going to come up here, and we're going to take up House Bill 1010.
Chair
Unverified
8:50
Representative Jett, you're authorized to speak for your bill. Thank
Representative Joe Jett
Unverified
8:56
you, sir. Members, this is actually my very first known bill this session, so it's not DFA for a change. The bottom line is, in the state of Arkansas, if you sell an airplane to somebody in the state and the airplane goes out of the state of Arkansas, in other words, it's not hanged or housed in the state of Arkansas, the seller, airplanes below 9,500 pounds, the seller is obligated to collect that sales tax, remand it back to DFA, DFA gets with the corresponding state where the airplane
is going to, and they work out the transaction, whatever that formerly is. The problem here in the state is we have several what we call MROs, or maintenance repair operators. So when airplanes come into the state, like if somebody, for example, sells an airplane from, say, Oklahoma to somebody in Tennessee, Arkansas is halfway, well, they want the airplane painted on or refurbished or engines or avionics or whatever the case may be, more than likely they're not going to do that transaction.
They're not going to let an MRO, maintenance repair operator, work on that plane in the state because airplanes are mobile, and most airplanes you can fly all the way across the state of Arkansas if they're any size at all in an hour's time anyway. So bottom line is the maintenance repair operators, they feel like they're losing hundreds of thousands of dollars, maybe millions of dollars, because the airplanes are not staying here to be refurbished. They're going to what we call flyaway exemption state, which is Kansas. Around us is Kansas, Missouri, Tennessee, and up in my part of the world. And in terms of fair disclosure,
I have an airplane aircraft dealer's license. So when I sell an airplane, what I do is I take it to Park Bluff, Missouri, because it's all of 15, 20 miles from me. Fly the airplane up there. We do the airplane transaction on the ramp in Park Bluff, Missouri, and I do not have to collect sales tax who ever buys the airplane because the airplane's not staying in the state of Arkansas. And so bottom line is the gist of this is we whittled this down since, I guess, three sessions now. And let me back up also.
The money that generated, the sales tax money generated does not go to general revenue. That money goes to a special-use revenue fund. That money's dispersed out through the state through the grant program to 92 airports across the state of Arkansas. So it's taken, Mr. Cosgrove, my right, he'll sit here and probably testify that we've done this, started whittling this down over a period of six, seven, eight years now because we don't want to do harm. We don't do anything to destroy the integrity of that funding mechanism that money goes out to the state.
You know, the aeronautics people will tell you, and I actually served on Department of Aeronautics for five years prior to doing this. We will tell you that Arkansas has the premier department, aeronautics department, and the premier rural airports in the state of Arkansas. People, other states are envious of Arkansas airports because of this grant program. So we don't do anything that destroys the integrity of this grant program. So we've been very careful about this because when you don't collect a sales tax for an airplane, that's money that would have went into this program.
But DFA has actually scored this, and if Paul wants to, they can come down and testify to this if any members want to hear DFA say it. But DFA has actually scored this zero impact because nobody's selling airplanes in the state. And when nobody sells an airplane in the state, that means no work gets done on an airplane in the state. So what we think is we can clean this law up, let Arkansas become a flyaway exemption state just like Kansas, Missouri, Tennessee, And then, like in me and Arkansas, a gentleman to Keith Rose, he has, like, a big MRO place down there, and he gives these folks work.
And he told me personally on the phone, he thinks by doing this, he can capture over a million dollars' worth of business going forward. So that's my gist, and if you don't care, I'll let Mr. Wills to my left. And he's the president of, excuse me, I think everybody knows Robbie Wills, but he's the president of Arkansas General Aviation Association, and they do support the bill. Go ahead.
Speaker 44
13:03
Thank you, Mr. Chairman. Members, I appreciate the opportunity to speak in favor of this bill.
Speaker 44
13:13
yourself for the record, please? Yes, sir. I'm rusty, Mr. Vice Chairman. Sorry about that. No, I'm Robbie Wills. I'm Robbie Wills. I'm the president of the Arkansas General Aviation Association and the ARGAA represents our state's general aviation airports, general aviation businesses that are located at those airports and we've number over 500 aircraft pilots and aircraft owners in the
state. As Chairman Jett said, we think we're losing business to other states and this will help us compete on a level playing field. I would just note that there's already an exemption for aircraft that are 9,500 pounds and above. And for those of you unfamiliar with aircraft, those are the big ones. So we're talking about the small ones, the two-seaters, the four-seaters that folks like me enjoy flying around the state. And the bottom line is that sales tax is the difference in many, many cases between somebody getting their airplane refurbished in Mena, Arkansas,
or going to Wichita, Kansas. And an airplane can get to Wichita, Kansas in a short period of time, and it's worth the trouble. So we appreciate the chairman using his experience to bring this bill and would certainly appreciate this committee giving this bill a good
Representative Monte Hodges
Unverified
14:39
vote. Members, do you have any questions? Representative Hodges. Just a basic question. These MROs, so do you think this will open up avenues for more of those MROs
Representative Joe Jett
Unverified
14:48
to come to the state of Arkansas and provide jobs? Absolutely. I mean, you take a look at MENA. MENA's got paint shops, poultry
shops, engine shops. Well, you know, it's kind of like that deal of success breeds success. It's sort of like in your backyard. You know, we had Nucor and Big River Steel and then the residual stuff off of that. It's the same type of energy, I guess you will, in the industry. Once somebody starts making money and, you know, be successful in whatever they're trying to do as far as maintenance of an airplane,
and then somebody drives down the road and they look out there and this guy's painting 1,500 airplanes a year, the guy says, you know, I can put a poster shop here and I can capture, you know, coming off the airplane stuff. Because a lot of times when somebody redoes an airplane, you know, like I've done several, I guess, over the years, typically I'll try to do the poster and paint and motors, avionics at the same time. You know, it makes it just cost-effective by tearing stuff out, putting stuff back together. And airplanes aren't like cars. I mean, most general aviation airplanes are probably 1970, 1980 models and typically get rebuilt about every 10 years.
so yes sir i think i think obviously i wouldn't be doing the bill if i didn't think it's a good bill but but at the end of the day this is a economic development tool i guess if you will for the aviation industry in
Speaker 53
16:19
the state of arkansas representative ease thank you um i appreciate you bringing this bill to our attention i would say that probably most of the committee members maybe most of the people in arkansas don't realize that the number one export in arkansas is aviation related components it's it's not rice believe it or not i think so gentlemen my right excuse me i
think yeah i just want to testify that here yeah and and there's also a gym we have in some of these mros in arkansas that do refurbishing of airplanes and do engine rebuilds i mean mina arkansas has one of the most well-renowned service facilities that i've ever heard of and there's a lot of compliments on the work they do there so i would uh wouldn't you agree
Representative Joe Jett
Unverified
16:56
is the question. Yes, sir. And I will add to you, thank you for that, Representative Eves. I don't know if I'm at liberty to say the name of the company, but there's a big, big company in the state of Arkansas, and Mr. Kazi come to me four or five, six years ago. I think if my memory serves me
correct, I might be wrong on this, but somebody's buying a $50 million jet from Hong Kong, bringing them back to the state. They want to refurbish the airplane here in Little Rock, but because of the sales tax issue, they decided they were going to take the airplane to New Jersey I think is what it was to do the, and we're talking on the refurbishment, we're talking 10, 15, 20 million dollars, I don't know what it was but it was a big figure so that's really kind of what got me started on this but we started kind of taking small bites of this because we didn't destroy the integrity of the funding
mechanism to the Department of Aeronautics but we're down to the 9,500 pounds now so now to Mr. Wills what he said a while ago, we're down to the small airplanes and Department of Aeronautics I've been to multiple talks with those guys. They'll tell you they're neutral on this because of the politics reason. We all understand that. But they understand that this is a bill that we think that will bring in more industry to the state, which in turn brings in more sales tax to their fund, which in turn puts more money into your district and your local airports.
Chair
Unverified
18:16
Okay. Are there any more questions? I think we have one more person signed up to speak. is Carl Finch in the room. Thank you for coming, Mr.
Carl Finch
Unverified
18:37
Finch. If you'll introduce yourself for the record. My name is Carl Finch, and I'm speaking on behalf of the Arkansas Aerospace Alliance and the 10,000 people that work in the aviation industry in Arkansas.
And I have, and also our company is Air Resource Group. I've been buying and selling airplanes, managing and flying them, doing maintenance on them for the last 40 years. And up until 2017, I think it was, when Chairman Jett and Mr. Causey worked real hard to get the exemption passed for aircraft 9,500 pounds and above, you know, we were laboring under what was probably one of the worst, what we call flyaway laws in the country.
It was, first of all, it was not generating any income at all because in a situation where you have an in-state seller and an out-of-state buyer, or as it even was back then, if you had an out-of-state seller and an out-of-state buyer, if you close the transaction with the airplane on the ground in Arkansas, it was subject to tax. And it basically just killed our ability to close a sale in Arkansas unless the airplane was going to be based in Arkansas. This pretty well excluded us.
It made it more difficult on the aircraft buyer and seller. It pretty well excluded us from the large amount of maintenance that always comes around the sale of an airplane, whether it's inspections, repairs, interior, exterior refurbishment, that kind of thing. It has completely cut us out of that. But I can tell you that since this was passed back in 2017, the results have been phenomenal as far as our ability to compete in this marketplace.
Right now, there is about 49 states that have some type of tax exemption to incentivize the aviation business to move there. And what they have built here is the beginnings of an incredibly competitive environment for us to where we can go out and win a lot of business that we couldn't do before. And what this is an opportunity to do is to take the success that we've seen with the larger aircraft
and extend that down to the smaller aircraft, which will help us quite a bit right now because we've seen a shift just in the last year or so back towards a lot of aircraft that are under this 9,500-pound weight that are pretty sophisticated turboprop aircraft, single-engine turboprop aircraft that are two $3 million airplanes, and we've also seen an expansion into the smaller jets and turboprops because people are just looking for more efficient,
cost-effective transportation. And so this will open up that part of the market to us too, to go after all the maintenance and everything that's related to the sale of an aircraft. And so I think what we're doing here is just building on the success that started back in 2017, and we're doing it at no expense to the state. All right. Thank you. Committee,
Chair
Unverified
21:55
do you have any questions for Mr. Finch? Yes. Representative Lynch.
Representative Roger D. Lynch
Unverified
22:03
I see or listen to this. It sounds to me like this would be a revenue generator for the state. Absolutely. Absolutely. If your industry is anything like mine, I pay sales tax on everything. We see evidence of
Speaker 68
22:16
it every day, every day. Are there any other questions? Representative
Chair
Unverified
22:21
Jed, are you closed? I'm closed, Mr.
Representative Joe Jett
Unverified
22:26
Chairman. Committee, what's your pleasure? Motion.
Chair
Unverified
22:33
All in favor? Aye. Opposed? Congratulations, Representative Jett. He passed your bill. Thank
Speaker 54
22:40
you, committee. Thank you, sir. Now, when he gets done congratulating
Chair
Unverified
22:46
himself down there, he'll have another one just in a second. I heard that.
Representative Joe Jett
Unverified
22:53
That's cold-hearted. I passed one bill, and I get to brag about myself, and I
Chair
Unverified
23:01
can't even do it. Representative Jett, you're recognized to present House Bill 1031.
Representative Joe Jett
Unverified
23:05
Thank you. Members, we're back to DFA bills. Okay. Thank you. The long and short of this bill is required electronic filing of income tax returns by tax practitioners and to amend the law concerning that. And I'm going to let Paul from DFA introduce himself, and
Speaker 74
23:30
he'll tell you what we're trying to do here. Thank you, Mr. Chairman. Mr. Vice Chair, Paul Goering, DFA. House Bill 1031 would require a tax practitioner, and that is a person that prepares tax returns for compensation or for hire.
If they file the taxpayer's federal tax return electronically, they would likewise
Speaker 75
23:49
also have to file the state income tax return electronically. Now, there
Speaker 74
23:56
is a carve-out in the bill to provide that if this would create an undue hardship on the practitioner, practitioner, DFA would be authorized to grant a waiver to that practitioner. The goal of this legislation is to reduce the administrative costs on DFA, to bring
down the manual processing of paper returns that is much more expensive for the state to do than processing electronically filed returns. We are anticipating if this legislation were to be passed by the General Assembly, we could bring up our rate of electronic filing to be more consistent with the filers on the federal side. Currently, we have to pay an additional $4.51 per return that's paper filed. We're hoping to reduce and
Speaker 75
24:42
eliminate as much as that cost as possible. We'd be happy to
answer any questions if the committee
Chair
Unverified
24:50
has questions. I have just one, just for absolute clarification, so it's on the record. This does not affect an individual filer that wants to file by paper. That's correct. Okay. Representative Mayberry? Thank
Representative Julie Mayberry
Unverified
25:04
you, Mr. Chair. I had sent a message to Representative Jet earlier today. I have an accountant who brought up some very important concerns. I do see that you have a way for someone ahead of time if it's going to cause some undue hardship. But, you know, just an example,
let's just say a tornado hits and, you know, they're, I mean, just whatever emergency and And that might not be something that they've kind of cleared with you ahead of time. And so how are you going to handle those situations? We don't want someone to
have this penalty on them. Can you help explain how, let me see, she said that would we have the ability, as we do in a federal return, to include
a form to describe why the return was not electronically
filed? would this be something that needed to be in legislation or could it just be included in
Speaker 75
26:01
instructions right and I thank you for your question representative we did not put any type of penalty
Speaker 74
26:07
in the law in case but certainly there are going to be multiple ways if they're in your example if there's you know tax season in Arkansas
Speaker 75
26:15
coincides with severe weather we certainly understand that things are going to occur that may impact
Speaker 74
26:21
a practitioner's ability to, if they filed the federal return, they have not yet filed the state return, but
broadband was destroyed in their neighborhood. DFA, we want to work with taxpayers. If they reach out to us and they just give us any good faith reason why they were unable to file the return, the Arkansas return electronically, we are going to honor it. We just wanted to avoid the situation where there's just no good reason to, if you're going to file federal electronically, to also file the Arkansas return electronically.
Representative Julie Mayberry
Unverified
27:00
Go ahead. How will that be communicated? Is it like another form online that they would send to you? Is it just an email? Is it a phone call? You know, what kind of, how would
Speaker 74
27:16
they share with you what their hardship is then? Certainly. And we certainly can develop that into our annual forms in our booklet. We would certainly put this information in our booklet. There is limited space now that remains on the Arkansas income tax return due to the numerous things that have to be reported, credits, income,
et cetera. But certainly we're going to have the information available, who to contact at DFA in case you do have an emergency situation that you want to request that waiver. We have the resources. We have a number of individuals that are tasked in our phone bank and individual income tax. There's a number of ways that we can handle taxpayer requests to make sure that a waiver can be granted upon request. Okay. Do you mind
Representative Julie Mayberry
Unverified
28:01
one more question or I'll get back in the queue? I'll
Chair
Unverified
28:04
get back to you. I've got a couple more. Representative Lundstrom, and before you speak,
for information for you all, the acoustics and the sound system in here has a terrible feedback problem. So if you guys will raise your hands and the ABLE staff is watching and we'll put you on a list because if we push our buttons and turn more than one mic on a time, it makes funny things on the recording. Okay? Just help us with that. Go ahead, Representative Luster. Thank you. There's no charge
Representative Robin Lundstrum
Unverified
28:35
for this, or is there a charge for the paper or the electronic, either one?
Speaker 74
28:41
There's no. Typically with electronic filing, there are some software companies that make a charge for using their software to prepare a return electronically. There's not a charge that DFA charges to file a return electronically.
Speaker 75
28:55
Follow up. Same with the paper. There's no charge from DF&A. I understand
Representative Robin Lundstrum
Unverified
29:03
the outside preparer may charge. That's correct. We do not charge in order
Speaker 74
29:10
for an individual to file their return on paper.
Thank you. That charge is the additional administrative cost is borne by the agency. Representative
Speaker 90
29:24
Mayberry. That was my question. All right. Thank you. Representative Eves.
Speaker 53
29:29
Yeah, so it's up to $250. What about over $250? We already addressed that previously.
Speaker 92
29:34
I think that's in the next bill, Representative Eaves.
Representative Jim Wooten
Unverified
29:41
Thank you. Representative Wooten. Thank you, Mr. Chairman. Mr. Caring, you referenced $4.51.
I missed what was that?
Speaker 74
29:51
That is our estimated additional cost per return in order to process a paper filed return. When we receive a paper filed return, we have employees that are tasked with opening the return, scanning the return into the system, and then also entering the data into the system from the return. We also have a vendor that we work with that helps us with this process as well.
When we receive a return electronically, that data is imported into the system from the preparer that is submitting the return to us. We are hoping to be able to minimize our administrative costs of processing paper returns. We certainly understand that there are going to be individual taxpayers. they've always always sat down with a calculator their paper return and their w-2s and they fill that return out by hand or on a tax processing system but then they're going to print it out
and mail it in this doesn't affect those individual taxpayers this only applies to a tax practitioner that is doing this as an occupation and only if they file the federal return electronically would this requirement apply. If they're filing the federal return on paper, this law would have no applicability. Okay. Thank you. Thank you, Mr. Chairman. Okay. Are there any other questions? Representative Jett, are you closed for your
Chair
Unverified
31:18
bill? Yes, sir. I'm closed. I'll entertain a motion.
Okay. We have a motion. Representative Warren. Do pass. All in favor? opposed your bill passed okay let's move on to house bill 1050 thank you mr chairman thank
Representative Joe Jett
Unverified
31:44
you committee members house bill 1050 what this does is reduces the number
of employees required for mandated filing from 250 to uh 225 i believe 25 right 25 with that i'll let mr goering explain what they're doing here thank you
Speaker 74
32:02
Mr. Chairman. So certainly what we're trying to do here currently with our withholding statements, we're trying to also achieve a greater level of electronic filing of withholding statements. We have an issue regarding if we're receiving these statements by paper, again, we're going to have to key this information into the system. Also, we are receiving returns for those individual taxpayers that we have to match the withholding reported on the individual's return to the withholding information that's been submitted by the employer.
If we receive these withholding returns and W-2 information on paper, it takes a lot of time for our staff in order to process these paper-filed withholding and W-2 reports. So this would affect, as you note in the revenue impact, we do receive paper withholding tax statements of about 3,876 employers between 25 and 250. What we're trying to do is get more in line with what some other states are doing.
Kentucky, Alabama, Mississippi, they have aligned this number of 25 for the number of employer threshold. The state of North Carolina, is my understanding, they require this to be filed electronically for all employers. Currently, the Treasury is in the process of bringing the threshold down from 250 to 10. So at some point, the federal requirement will be 10 at some point, but we're wanting to make it 25, which would be similar to other states that are nearby.
Of course, Tennessee, Texas, Florida, they don't have an income tax, but these other states in the South have
Speaker 75
33:54
done a similar threshold. We'd be happy to answer any questions. All right. Thank you,
Speaker 51
33:59
Mr. Gehring. Are there any questions? Representative Mayberry? Thank
Representative Julie Mayberry
Unverified
34:05
you, Mr. Chair. And I guess kind of along the same lines is there's some type of backup program, and I don't see anything written in this bill, whereas the other one did say you can request a waiver or something like that, and there's nothing really written here. So give me security that, you know, Internet can be unpredictable, and so give us some security that we're not going to have
Speaker 82
34:27
constituents call us and say, hey, we couldn't do this.
Speaker 74
34:31
Thank you, Representative Mayberry. That's a very valid point. It's currently in the Tax Procedure Act. DFA does have the discretion for in circumstances where there are mistakes, problems, issues on the taxpayer side. We can work with a taxpayer if situations arise, such as losing their Internet connection due to a natural disaster, having a tornado rip through their business. We always are going to work with a taxpayer. But, of course, we want to make sure that we are also in line with what our surrounding states are doing to achieve greater processing times for the employees that are filing their income tax returns.
It may be that members of this committee have gotten those calls in the past on, I filed my income tax return. DFA has not given me my refund yet. And I know that we've gotten, I've received a lot of those calls over the years asking, where is my refund? Where is my refund? This will help that process. If we have this information by the deadline to file the withholding reports by, I believe it's January 31st, If we have this information electronically, so when we start receiving the returns in February and March, we've already got this data in the system.
We can pull up that taxpayer's return. We can verify the withholding reported on the return with what
Speaker 75
35:54
the employer submitted to us electronically. But to your question, absolutely. We are always going to help the employer
Senator Lance Eads
Unverified
36:03
that has the responsibility for filing the report. If there's
Speaker 101
36:16
assist. Okay. Thank you. Representative Wooten,
Representative Jim Wooten
Unverified
36:18
do you have a question? Yes, Mr. Chairman. Mr. Gang, when the employer files electronically, do you already have in place the technology to permit you to parallel that with the taxpayer, or are you still going to have to pull it up on the screen?
Speaker 74
36:39
Yes, Representative Wooten, our system does have the capability to match the record from what is reported on an individual's income tax return in terms of the withholding taxes from that individual's employers with the information that was filed in the employer's withholding statement. So, yes, we do have that ability to cross-check that information
Representative Jim Wooten
Unverified
37:07
electronically. They're constantly. You won't have to utilize additional manpower. It'll automatically do that.
Speaker 74
37:14
And that's certainly the issue that this bill is trying to address is that we are going to start receiving taxpayer returns here in the next few weeks. And with the current deadline, the taxpayer may file their return with us beginning in February. If we have received a paper withholding report from the employer that we are having to key, it's going to delay that process of verifying what the individual has reported as withholding as to what the employer has reported as withholding.
And I think that from time, we do a lot of fraud checks as well, because a very popular scam that individuals try to perpetuate at state level and also at the federal level is that individuals will file fraudulent returns with states, with fraudulent withholding information on their return, with the hope that the employer, with the state not having the employer information,
with the hope that the state will issue the refund to the individual while they're waiting for this cross-checking process to occur. Now, we do have multiple layers of security in the system to try to avoid that occurring, but if we have the electronic data sooner, that will aid in that process of ferreting out the fraud. All right. Thank you. Thank you, Mr. Chairman. Mr. Vice Chair,
Representative Joe Jett
Unverified
38:43
I might add, Representative Mayberry, if you have concerns, we can, if the bill comes out of the committee, if the committee wants this bill to come out today,
we can amend it going back on the Senate end. I don't think DFA would have a problem with that, would it? No, sir. Put the same language that was in that 1031. I mean, that would
Chair
Unverified
39:07
be strictly your call, but I'd be
Representative Les Warren
Unverified
39:12
open to that. Okay. Representative Boren, you're recognized. Thank you, Mr. Chair. Paul, you may have said this. With getting all the retirement bills filed this week, I haven't been able to do as much work, but I've been texting back and forth with two of my key CPAs in Hot Springs,
and both of them had a similar response. One says we file all our businesses, W-2s, e-file, but maybe be a problem for some small businesses. The other one will catch some small businesses that perform their own payroll that don't have the technology. So, I mean, I caught you saying there's nobody that we won't work with. What's the solution for those that just aren't that advanced? Certainly.
Speaker 74
39:57
And the threshold that the states have adopted is the 25-employee threshold. So I certainly understand there's probably a lot of businesses out there that are in that neighborhood. But 25 is a number that multiple states have
Speaker 75
40:10
adopted, and the feds are moving toward 10 for electronic filing at some point. So it looks like they're even shooting for a lower number. It would be up to the General Assembly if they ever wanted to match ultimately where the feds are going to land.
but 25 seems to be the number that some of our states in the
Speaker 74
40:32
South have adopted as a good threshold to make sure it's not being too onerous on the very small businesses that like to do everything themselves and prepare these documents on paper. Representative
Representative Joe Jett
Unverified
40:45
Warren, I would probably add, I'd just advise them to call the representative and complain, get all their employees to call you all night long to complain.
Chair
Unverified
40:56
All right, thank you. Representative McGrew, you're recognized.
Representative Richard McGrew
Unverified
41:04
Representative Beatty. Just a question to make certain I understood what you're saying. For the 3,876 employers that have 25 to 250 employees, DFA is hand-keying all the W-2 information? That is correct. Okay, thank you. Representative Hawks,
Chair
Unverified
41:27
did you have a question? Thank you, Mr.
Speaker 108
41:32
Chair. What is the federal deadline or target for the 10 employees?
Speaker 74
41:43
that date? It's a very good question. With the COVID, that timeline is subject to the Treasury making a determination. so we
Speaker 75
41:50
would have to get more information in the future from when the IRS is deciding to fully implement and bring that down to that specific number. They announced the rulemaking back in 2019, but of course, you know, a lot has happened since 2019. But the current federal threshold is the 250,
but they announced their intention to bring it down to a 100 and then to
Chair
Unverified
42:17
10. All right, is there anyone in the audience that wishes to
speak for or against the bill? All right. Seeing none, what's your pleasure? We have a do pass motion.
Representative Joe Jett
Unverified
42:32
All in favor? Aye. Opposed? Okay, you passed it. Thank you. Thank you, Mr. Chairman. Committee members, just a
couple housekeeping things. Please write these numbers down.
Next Tuesday, we're going to look at House Bill 1065, house bill 1023 house bill 1091 all those bills have fiscal impacts all the sponsors says they know they'll not have a motion received on the bills but they want to present the bill go through the whole the whole motion of presenting a bill in committee but they know that will not accept a motion because they do have fiscal impacts so we're gonna knock those three out and then if everything goes all right the following next thursday if everything if we
can get this the subtle uh syrup tax rounded up we're probably just going to take that bill and only that bill the following thursday so everybody kind of be a heads up on that that could be kind of controversial that bill these other these other three bills um they shouldn't be too controversial i mean um right now because we're not taking a motion to pass them but on the soda bill uh just y'all might want to do your homework on that also one other quick thing um i've been lit up on been accused of passing a gas tax i promise you nobody's passing the gas tax this
session it was dfa had a bill that was brought to us that will not run but but the bottom line on the bill was there was a drafting error in the code and we was going to clean the code up but the way the title of the bill is written it makes it gives all the appearance it looks like we're he's trying to pass another gas tax. It was cleaning the code up of last session. The bill was filed, early filing bill, set there for about, I guess, five or six weeks. But anyway, long story short, some folks who got a hold up in the last couple of days
and accused me of trying to pass another gas tax, which we will not
be entertaining this committee. So, yes,
Representative Jim Wooten
Unverified
44:27
sir. That's the earliest thing from the jury as it relates to, they messed
Speaker 63
44:34
up, unfortunately, in calculating the multiplier. Representative Wooten, would you turn your
Chair
Unverified
44:40
mic on so we could all hear? Thank you.
Representative Jim Wooten
Unverified
44:44
It was not going to be a tax increase to start with, but they messed up over DFA, unfortunately,
not intentionally. They miscalculated, Mr. Gehring, I'm assuming the multiplier as to how it would apply only to the three cents. But as it was cast to begin with, guess it could only increase a tenth of a cent a year, regardless of what the multiplier said, regardless of when they went back and looked. It was designed to help the highway department
not to face continual declining income as it relates to the fuel tax. But it was not an increase. It was not intended that way. And I agree with Chairman Jez. Just leave it alone. It's over with. It's done. And let's just move on. Yes, sir. I appreciate that. Thank you, Mr. Chairman. Thank you, sir.
Representative Joe Jett
Unverified
45:45
Yes, sir. DFA does a good job for us. And sometimes, you know, mistakes just happen. So if you guys get lit up like I'm getting lit up right now, just know that we're not passing a gas tax.
Representative Robin Lundstrum
Unverified
45:58
Yes, ma'am. Thank you. Would it be better to put language in the title and fix the title so it just says it's corrective so that people understand what
Representative Joe Jett
Unverified
46:07
we're talking about? I think I'm just going to pull the bill down. I'm just going to let it go. Let
Chair
Unverified
46:14
it go. Yes, ma'am. Sounds good. Yes, ma'am. Representative Jett, just for clarification, because some of the old people up here didn't understand you clearly, next Thursday is what you're talking about, a week from today, correct?
Representative Joe Jett
Unverified
46:23
Yes, sir, for the soda tax, syrup tax? Yes. But we got – now, that's not set in stone.
These three bills that I gave you are set in stone for next Tuesday. But the syrup tax, if everything works out and we get the kind of behind-the-scenes stuff worked out, we will be hearing that next Thursday, a week from today. And like I said, that can be controversial, so y'all might want to start doing your due diligence on that bill. Thank you. We just want to have that
Chair
Unverified
46:48
perfectly clear. All right. Thank you, committee. Okay. And, Mr. Chairman, there are several of the people here that are a whole lot better looking than you and I that want to know when we're going to have our picture taken.
Representative Joe Jett
Unverified
47:00
Yeah. We'll stand at the back. Yes. Well, as long as Chairman Gene don't even show up, he's a lot better for that, but as ugly as he is. We'll try to get that wrapped up sometime next week, and we'll get back with you. I'll be honest with you, with everything else going on, I've not even tried to hook up because all these other committees are doing it. So when all these other committees are doing it, they're going to push us back anyway. But we will get that knocked out in the
Chair
Unverified
47:26
next couple of weeks. All right. Is there any more business? Adjourn.
Agenda
REGULAR AGENDA Number Sponsor Subtitle
HB1010 Jett TO AMEND THE SALES AND USE TAX EXEMPTION FOR SALES OF CERTAIN AIRCRAFT.
HB1031 Jett TO REQUIRE THE ELECTRONIC FILING OF INCOME TAX RETURNS BY TAX PRACTITIONERS; AND TO AMEND THE LAW CONCERNING TAX PRACTITIONERS.
HB1050 Jett TO REDUCE THE NUMBER OF EMPLOYEES REQUIRED TO MANDATE THE ELECTRONIC FILING OF ANNUAL WITHHOLDING STATEMENTS.
HB1109 Eubanks TO AMEND THE LAW CONCERNING THE DEPOSIT OF FUNDS BY THE UNCLAIMED PROPERTY ACT
HB1158 M. Gray CONCERNING THE PRISON CONSTRUCTION TRUST FUND; AND TO DECLARE AN EMERGENCY.
DEFERRED BILLS Number Sponsor Subtitle
HB1030 Jett TO PREVENT UNEXPECTED REDUCTIONS IN REVENUES FROM THE WHOLESALE SALES TAXES ON MOTOR FUEL AND DISTILLATE SPECIAL FUEL BY AMENDING THE LAW CONCERNING THE CALCULATION OF THE WHOLESALE SALES TAXES.
HB1034 Jett TO AMEND THE EXCEPTIONS TO THE PROHIBITION AGAINST THE DISCLOSURE OF TAXPAYER INFORMATION; AND TO DESIGNATE THE SECRETARY OF THE DEPARTMENT OF FINANCE AND ADMINISTRATION AS THE OFFICIAL CUSTODIAN OF CERTAIN RECORDS.
HB1035 Jett TO ADOPT RECENT CHANGES TO THE INTERNAL REVENUE CODE.
HB1038 Jett TO CLARIFY THAT SALES TAX IS REQUIRED TO BE COLLECTED AND REMITTED ON DELIVERY CHARGES FOR SALES BY A MARKETPLACE FACILITATOR.
HB1043 Jett TO AUTHORIZE THE WAIVER OF CERTAIN AD VALOREM TAXES ON UTILITIES AND CARRIERS; AND TO CREATE A STATUTE OF LIMITATIONS ON THE COLLECTION OF CERTAIN AD VALOREM TAXES ON UTILITIES AND CARRIERS.
HB1046 Jett TO CLARIFY THE ABILITY OF LEGAL COUNSEL FOR THE SECRETARY OF THE DEPARTMENT OF FINANCE AND ADMINISTRATION TO REQUEST REVISION OF A HEARING OFFICER'S DECISION.
HB1047 Jett TO CLARIFY THAT A TAXPAYER'S AGENT MAY FILE A PROTEST ON BEHALF OF A TAXPAYER IF THE TAXPAYER PRODUCES A PROPERLY EXECUTED POWER OF ATTORNEY AT THE TIME OF THE FILING.
HB1048 Jett TO AUTHORIZE THE OFFSET OF A TAX REFUND TOWARD A TAX DELINQUENCY WHEN A FINAL ASSESSMENT OF TAX HAS BEEN ISSUED.
HB1049 Jett TO ALLOW THE WITHHOLDING OF STATE INCOME TAX FROM UNEMPLOYMENTCOMPENSATION BENEFITS AND UNEMPLOYMENT INSURANCE BENEFITS.
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — REVENUE & TAXATION- HOUSE, Jan 28, 2021 | Agenda | 2 | Official source ↗ |
Speakers
Representative Joe Jett
Unverified
Representative Les Warren
Unverified
Speaker 6
Representative Michelle Gray
Unverified
Speaker 17
Speaker 19
Representative Denise Garner
Unverified
Representative Monte Hodges
Unverified
Chair
Unverified
Speaker 44
Speaker 43
Speaker 53
Carl Finch
Unverified
Representative Roger D. Lynch
Unverified
Speaker 68
Speaker 54
Speaker 74
Speaker 75
Representative Julie Mayberry
Unverified
Representative Robin Lundstrum
Unverified
Speaker 90
Speaker 92
Representative Jim Wooten
Unverified
Speaker 51
Speaker 82
Senator Lance Eads
Unverified
Speaker 101
Representative Richard McGrew
Unverified
Speaker 108
Speaker 94
Speaker 63