Revenue & Taxation- House
Video
Transcript
1 document
Bills discussed (59)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
|
HB1750
· 8 mentions in agenda, chapter, transcript
Matched: “…ROVIDE A SALES AND USE TAX EXEMPTION FOR DISABLED VETERANS. HB1750 Cavenaugh TO REPEAL THE ARKANSAS CORPORATE FRANCHISE TAX AC…”
|
TO REPEAL THE ARKANSAS CORPORATE FRANCHISE TAX ACT OF 1979; AND TO MAKE CONFORMING CHANGES. | Cavenaugh | Died in House Committee at Sine Die adjournment. |
|
HB1699
· 7 mentions in transcript, chapter, agenda
Matched: “…iate you being here, uh, members, we're gonna go back up to HB 1699 representative”
|
TO ADD FIREARM SAFETY DEVICES AND FIREARM STORAGE DEVICES TO THE SALES TAX HOLIDAY; AND … | McCullough | Died in House Committee at Sine Die adjournment. |
|
HB1738
· 6 mentions in chapter, transcript, agenda
Matched: “HB1738 Crawford TO PROVIDE A SALES AND USE TAX EXEMPTION FOR DISAB…”
|
TO PROVIDE A SALES AND USE TAX EXEMPTION FOR DISABLED VETERANS. | Crawford | Died in House Committee at Sine Die adjournment. |
|
HB1636
· 4 mentions in transcript, agenda, chapter
Matched: “…1698. HB 1702 HB 1807. SB 412 SB 503. HB 1809. HB 1685 and HB 1636. So we're gonna be in here a little while”
|
TO AMEND THE ARKANSAS SOFT DRINK TAX ACT, AS AFFIRMED BY REFERRED ACT 1 OF … | Ray | Recommended for study in the Interim by the … |
|
HB1685
Act 1008
· 4 mentions in chapter, transcript, agenda
Matched: “HB1685 Underwood TO CREATE THE GROCERY TAX RELIEF ACT; TO AMEND TH…”
|
TO CREATE THE GROCERY TAX RELIEF ACT; TO AMEND THE LAW CONCERNING THE SALES AND … | Underwood | Notification that HB1685 is now Act 1008 |
|
HB1698
· 4 mentions in transcript, chapter, agenda
Matched: “99 HB 1738 HB 1750. HB 1804 HB 1698. HB 1702 HB 1807. SB 412 SB 503. HB 1809. HB 1685 and HB 16…”
|
TO AMEND THE LAW CONCERNING THE INCOME TAX TREATMENT OF EMPLOYER CONTRIBUTIONS FOR AN EMPLOYEE'S … | Torres | Died in House Committee at Sine Die adjournment. |
|
HB1702
· 4 mentions in chapter, transcript, agenda
Matched: “HB1702 Wooldridge TO AMEND THE SALES AND USE TAX EXEMPTIONS FOR CE…”
|
TO AMEND THE SALES AND USE TAX EXEMPTIONS FOR CERTAIN MACHINERY AND EQUIPMENT USED IN … | Wooldridge | Died in House Committee at Sine Die adjournment. |
|
HB1804
· 4 mentions in agenda, chapter, transcript
Matched: “…FRANCHISE TAX ACT OF 1979; AND TO MAKE CONFORMING CHANGES. HB1804 Ray TO AMEND THE LAW CONCERNING THE LEVY OF THE GROSS RECEI…”
|
TO AMEND THE LAW CONCERNING THE LEVY OF THE GROSS RECEIPTS TAX, AS AFFIRMED BY … | Ray | Died in House Committee at Sine Die adjournment. |
|
HB1807
Act 879
· 4 mentions in agenda, transcript, chapter
Matched: “…EXEMPTION FOR UTILITY VEGETATION LINE MANAGEMENT SERVICES. HB1807 Eaves TO AMEND THE SALES TAX EXEMPTION FOR AIRCRAFT HELD FO…”
|
TO AMEND THE SALES TAX EXEMPTION FOR AIRCRAFT HELD FOR RESALE AND USED FOR RENTAL … | Eaves | Notification that HB1807 is now Act 879 |
|
HB1809
Act 880
· 4 mentions in transcript, agenda, chapter
Matched: “…8 HB 1750. HB 1804 HB 1698. HB 1702 HB 1807. SB 412 SB 503. HB 1809. HB 1685 and HB 1636. So we're gonna be in here a little wh…”
|
TO ALLOW FOR PROPERTY OWNED BY A TRUST OR A LIMITED LIABILITY COMPANY TO QUALIFY … | Warren | Notification that HB1809 is now Act 880 |
|
SB412
Act 614
· 4 mentions in agenda, chapter, transcript
Matched: “…vised 4-2-2025 @ 2:16 PM) Moved Bills to Deferred and Added SB412 and SB503 House Committee on Revenue and Taxation Thursday,…”
|
TO AUTHORIZE THE DEPARTMENT OF FINANCE AND ADMINISTRATION TO SET THE PER-MILE AMOUNT FOR THE … | J. Boyd | Notification that SB412 is now Act 614 |
|
SB503
Act 616
· 4 mentions in chapter, agenda, transcript
Matched: “SB503 Crowell TO REDUCE THE NUMBER OF EMPLOYEES AN EMPLOYER MUST…”
|
TO REDUCE THE NUMBER OF EMPLOYEES AN EMPLOYER MUST HAVE TO BE MANDATED TO FILE … | Crowell | Notification that SB503 is now Act 616 |
|
HB1444
Act 548
· 3 mentions in agenda, transcript, chapter
Matched: “…d McGrew CONCUR IN SENATE AMENDMENT Number Sponsor Subtitle HB1444 Pilkington TO AMEND THE SALES AND USE TAX EXEMPTION FOR DAT…”
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TO AMEND THE SALES AND USE TAX EXEMPTION FOR DATA CENTERS. | Pilkington | Notification that HB1444 is now Act 548 |
|
SB422
Act 615
· 3 mentions in chapter, agenda, transcript
Matched: “SB422 C. Tucker TO ALLOW NONPROFIT ORGANIZATIONS TO CONTRIBUTE TO…”
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TO ALLOW NONPROFIT ORGANIZATIONS TO CONTRIBUTE TO A NEW OR EXISTING ARKANSAS BRIGHTER FUTURE FUND … | C. Tucker | Notification that SB422 is now Act 615 |
|
HB1828
· 2 mentions in agenda, chapter
Matched: “…X EXEMPTION FOR DISABLED VETERANS IN CERTAIN CIRCUMSTANCES. HB1828 Breaux TO CREATE A SALES AND USE TAX EXEMPTION FOR INSPIRAT…”
|
TO CREATE A SALES AND USE TAX EXEMPTION FOR INSPIRATION POINT CENTER FOR THE ARTS, … | Breaux | Died in Senate Committee at Sine Die adjournment. |
|
HB1857
· 2 mentions in agenda, chapter
Matched: “…X EXEMPTION FOR INSPIRATION POINT CENTER FOR THE ARTS, INC. HB1857 L. Johnson TO AMEND THE LAW CONCERNING THE COLLECTION OF SA…”
|
TO AMEND THE LAW CONCERNING THE COLLECTION OF SALES AND USE TAX ON THE SALE … | L. Johnson | WITHDRAWN BY AUTHOR |
|
HB1862
· 2 mentions in agenda, chapter
Matched: “…ALES AND USE TAX ON A MOTORBOAT SOLD BY A MOTORBOAT DEALER. HB1862 J. Mayberry TO AMEND THE INCOME TAX CREDIT AND THE INCOME T…”
|
TO AMEND THE INCOME TAX CREDIT AND THE INCOME TAX DEDUCTION RELATED TO MAINTAINING, SUPPORTING, … | J. Mayberry | Died in House Committee at Sine Die adjournment. |
|
HB1881
· 2 mentions in chapter, agenda
Matched: “HB1881 Ennett TO ADD MENSTRUAL DISCHARGE COLLECTION DEVICES TO THE…”
|
TO ADD MENSTRUAL DISCHARGE COLLECTION DEVICES TO THE LIST OF ITEMS EXEMPT FROM SALES AND … | Ennett | Died in House Committee at Sine Die adjournment. |
|
HB1904
· 2 mentions in chapter, agenda
Matched: “HB1904 Lundstrum TO AMEND THE PENALTIES IMPOSED FOR FAILURE TO COM…”
|
TO AMEND THE PENALTIES IMPOSED FOR FAILURE TO COMPLY WITH THE ARKANSAS TAX PROCEDURE ACT. | Lundstrum | Died in House Committee at Sine Die adjournment. |
|
HB1920
· 2 mentions in chapter, agenda
Matched: “HB1920 McClure TO TRANSFER GENERAL REVENUE TO THE AGING AND ADULT…”
|
TO TRANSFER GENERAL REVENUE TO THE AGING AND ADULT SERVICES FUND ACCOUNT TO BE USED … | McClure | WITHDRAWN BY AUTHOR |
|
HB1922
Act 881
· 2 mentions in agenda, chapter
Matched: “…RVICES BENEFITING THE ELDERLY; AND TO DECLARE AN EMERGENCY. HB1922 Maddox TO AMEND THE CONSOLIDATED INCENTIVE ACT OF 2003; TO…”
|
TO AMEND THE CONSOLIDATED INCENTIVE ACT OF 2003; TO CREATE AN INCOME TAX CREDIT FOR … | Maddox | Notification that HB1922 is now Act 881 |
|
HB1932
· 2 mentions in chapter, agenda
Matched: “HB1932 McCollum TO AMEND LAWS CONCERNING THE CORPORATE FRANCHISE T…”
|
TO AMEND LAWS CONCERNING THE CORPORATE FRANCHISE TAX; TO REPEAL THE ARKANSAS CORPORATE FRANCHISE TAX … | McCollum | Died in House Committee at Sine Die adjournment. |
|
HB1935
Act 882
· 2 mentions in chapter, agenda
Matched: “HB1935 Eaves TO CREATE A MODERNIZATION AND AUTOMATION TAX CREDIT T…”
|
TO CREATE A MODERNIZATION AND AUTOMATION TAX CREDIT TO ENCOURAGE INVESTMENT BY EXISTING BUSINESSES WITHIN … | Eaves | Notification that HB1935 is now Act 882 |
|
HB1015
· 1 mention in agenda
Matched: “…R CERTAIN EMPLOYERS. DEFERRED BILLS Number Sponsor Subtitle HB1015 D. Garner TO AMEND THE INDIVIDUAL INCOME TAX LAWS; AND TO C…”
|
TO AMEND THE INDIVIDUAL INCOME TAX LAWS; AND TO CREATE AN INCOME TAX CREDIT FOR … | D. Garner | Died in House Committee at Sine Die adjournment. |
|
HB1016
· 1 mention in agenda
Matched: “…AND TO CREATE AN INCOME TAX CREDIT FOR DEPENDENT CHILDREN. HB1016 Ennett TO CREATE A SALES AND USE TAX EXEMPTION FOR MENSTRUA…”
|
TO CREATE A SALES AND USE TAX EXEMPTION FOR MENSTRUAL DISCHARGE COLLECTION DEVICES; TO CREATE … | Ennett | Died in House Committee at Sine Die adjournment. |
|
HB1018
· 1 mention in agenda
Matched: “…E TAX EXEMPTION FOR CERTAIN ITEMS RELATED TO BREASTFEEDING. HB1018 Hudson TO CREATE THE STRONG FAMILIES ACT; AND TO CREATE AN…”
|
TO CREATE THE STRONG FAMILIES ACT; AND TO CREATE AN INCOME TAX CREDIT FOR EMPLOYERS … | Hudson | Died in House Committee at Sine Die adjournment. |
|
HB1019
· 1 mention in agenda
Matched: “…ROVIDE PAID FAMILY AND MEDICAL LEAVE FOR CERTAIN EMPLOYEES. HB1019 D. Garner TO CREATE THE AFFORDABLE CHILDCARE ACT OF 2025; T…”
|
TO CREATE THE AFFORDABLE CHILDCARE ACT OF 2025; TO CREATE AN INCOME TAX CREDIT FOR … | D. Garner | Died in House Committee at Sine Die adjournment. |
|
HB1021
· 1 mention in agenda
Matched: “…COME TAX CREDIT FOR EMPLOYER-OPERATED CHILDCARE FACILITIES. HB1021 D. Garner TO CREATE THE EARLY CHILDHOOD EDUCATION WORKFORCE…”
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TO CREATE THE EARLY CHILDHOOD EDUCATION WORKFORCE QUALITY INCENTIVE ACT; AND TO CREATE AN INCOME … | D. Garner | Died in House Committee at Sine Die adjournment. |
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HB1026
· 1 mention in agenda
Matched: “…TIAL PROPERTY UNDER ARKANSAS CONSTITUTION, ARTICLE 16, § 5. HB1026 A. Collins TO CREATE THE ARKANSAS PROMISE ACT; AND TO CREAT…”
|
TO CREATE THE ARKANSAS PROMISE ACT; AND TO CREATE AN INCOME TAX CREDIT FOR TUITION … | A. Collins | Died in House Committee at Sine Die adjournment. |
|
HB1063
Act 875
· 1 mention in agenda
Matched: “…E TAX CREDIT FOR CERTAIN EARLY CHILDHOOD EDUCATION WORKERS. HB1063 J. Mayberry TO AMEND THE ACHIEVING A BETTER LIFE EXPERIENCE…”
|
TO AMEND THE ACHIEVING A BETTER LIFE EXPERIENCE PROGRAM ACT; AND TO AMEND THE DEFINITIONS … | J. Mayberry | Notification that HB1063 is now Act 875 |
|
HB1076
· 1 mention in agenda
Matched: “…O CHANGE DISABILITY ONSET AGE FROM TWENTY-SIX TO FORTY-SIX. HB1076 Hudson TO CREATE THE CARING FOR CAREGIVERS ACT; AND TO PROV…”
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TO CREATE THE CARING FOR CAREGIVERS ACT; AND TO PROVIDE AN INCOME TAX CREDIT FOR … | Hudson | Died in House Committee at Sine Die adjournment. |
|
HB1116
· 1 mention in agenda
Matched: “…FOR EXPENSES INCURRED IN CARING FOR CERTAIN FAMILY MEMBERS. HB1116 Ray TO CREATE THE REMOTE AND MOBILE WORK MODERNIZATION AND…”
|
TO CREATE THE REMOTE AND MOBILE WORK MODERNIZATION AND COMPETITIVENESS ACT; AND TO PROVIDE INCOME … | Ray | Died in House Committee at Sine Die adjournment. |
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HB1190
· 1 mention in agenda
Matched: “…ED TO CERTAIN REMOTE AND MOBILE EMPLOYEES AND NONRESIDENTS. HB1190 Vaught TO CREATE AN INCOME TAX EXEMPTION FOR TEACHERS. HB12…”
|
TO CREATE AN INCOME TAX EXEMPTION FOR TEACHERS. | Vaught | Died in House Committee at Sine Die adjournment. |
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HB1203
· 1 mention in agenda
Matched: “…1190 Vaught TO CREATE AN INCOME TAX EXEMPTION FOR TEACHERS. HB1203 Underwood TO PROTECT ARKANSAS TAXPAYERS FROM A TAX TO COLLE…”
|
TO PROTECT ARKANSAS TAXPAYERS FROM A TAX TO COLLECT TAXES. | Underwood | Died in House Committee at Sine Die adjournment. |
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HB1216
· 1 mention in agenda
Matched: “…E DEDUCTION FOR DEPRECIATION AND THE EXPENSING OF PROPERTY. HB1216 Long TO CREATE THE FREE MARKET ZONES ACT; AND TO EXEMPT A B…”
|
TO CREATE THE FREE MARKET ZONES ACT; AND TO EXEMPT A BUSINESS LOCATED IN AN … | Long | Died in House Committee at Sine Die adjournment. |
|
HB1366
· 1 mention in agenda
Matched: “…TO PROTECT ARKANSAS TAXPAYERS FROM A TAX TO COLLECT TAXES. HB1366 Ennett TO CREATE AN INCOME TAX CREDIT FOR QUALIFIED STORM S…”
|
TO CREATE AN INCOME TAX CREDIT FOR QUALIFIED STORM SHELTERS. | Ennett | Died in House Committee at Sine Die adjournment. |
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HB1388
· 1 mention in agenda
Matched: “…O CREATE AN INCOME TAX CREDIT FOR QUALIFIED STORM SHELTERS. HB1388 Vaught TO EXEMPT CERTAIN STORAGE SERVICES FROM SALES TAX; A…”
|
TO EXEMPT CERTAIN STORAGE SERVICES FROM SALES TAX; AND TO EXEMPT THE SERVICE OF FURNISHING … | Vaught | Died in House Committee at Sine Die adjournment. |
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HB1404
· 1 mention in agenda
Matched: “…URT FROM SALES TAX, AS AFFIRMED BY REFERRED ACT 19 OF 1958. HB1404 C. Cooper TO CREATE A TAX CREDIT FOR CONTRIBUTIONS TO A PRE…”
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TO CREATE A TAX CREDIT FOR CONTRIBUTIONS TO A PREGNANCY RESOURCE CENTER. | C. Cooper | Died in House Committee at Sine Die adjournment. |
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HB1435
· 1 mention in agenda
Matched: “…CREDIT FOR CONTRIBUTIONS TO A PREGNANCY HELP ORGANIZATION. HB1435 Achor TO AMEND THE LAW CONCERNING INCOME TAX CREDITS FOR CH…”
|
TO AMEND THE LAW CONCERNING INCOME TAX CREDITS FOR CHILD CARE; TO AMEND THE INCOME … | Achor | Died in House Committee at Sine Die adjournment. |
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HB1438
· 1 mention in agenda
Matched: “…LICENSED CHILDCARE PROVIDERS; AND TO DECLARE AN EMERGENCY. HB1438 Cavenaugh TO CREATE AN INCOME TAX CREDIT FOR TAXPAYERS SIXT…”
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TO CREATE AN INCOME TAX CREDIT FOR TAXPAYERS SIXTY-FIVE AND OLDER IN AN AMOUNT EQUAL … | Cavenaugh | Died in House Committee at Sine Die adjournment. |
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HB1464
· 1 mention in agenda
Matched: “…QUAL TO THE TAXPAYER'S PROPERTY TAX PAYMENT ON A HOMESTEAD. HB1464 Vaught TO CREATE A SALES AND USE TAX EXEMPTION FOR PARTS FO…”
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TO CREATE A SALES AND USE TAX EXEMPTION FOR PARTS FOR AND REPAIR OF AGRICULTURAL … | Vaught | Died in House Committee at Sine Die adjournment. |
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HB1469
· 1 mention in agenda
Matched: “…IGIBLE STUDENT AT A PUBLIC INSTITUTION OF HIGHER EDUCATION. HB1469 Beaty Jr. TO CREATE THE BROADBAND EXPANSION AND EFFICIENCY…”
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TO CREATE THE BROADBAND EXPANSION AND EFFICIENCY ACT; AND TO CREATE A SALES AND USE … | Beaty Jr. | Died in House Committee at Sine Die adjournment. |
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HB1472
· 1 mention in agenda
Matched: “…IPMENT USED IN PRODUCING BROADBAND COMMUNICATIONS SERVICES. HB1472 Beaty Jr. TO CREATE A SALES AND USE TAX EXEMPTION FOR PARTS…”
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TO CREATE A SALES AND USE TAX EXEMPTION FOR PARTS PURCHASED TO REPAIR AGRICULTURAL EQUIPMENT … | Beaty Jr. | Died in House Committee at Sine Die adjournment. |
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HB1485
· 1 mention in agenda
Matched: “…RTS FOR AND REPAIR OF AGRICULTURAL EQUIPMENT AND MACHINERY. HB1485 K. Brown TO CREATE A SALES AND USE TAX EXEMPTION FOR SALES…”
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TO CREATE A SALES AND USE TAX EXEMPTION FOR SALES TO CERTAIN ORGANIZATIONS THAT SUPPORT … | K. Brown | Died in Senate Committee at Sine Die adjournment. |
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HB1500
· 1 mention in agenda
Matched: “…TO CERTAIN ORGANIZATIONS THAT SUPPORT VETERANS' FACILITIES. HB1500 Beaty Jr. TO ENHANCE ECONOMIC COMPETITIVENESS BY REPEALING…”
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TO ENHANCE ECONOMIC COMPETITIVENESS BY REPEALING THE THROWBACK RULE. | Beaty Jr. | Died in House Committee at Sine Die adjournment. |
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HB1501
· 1 mention in agenda
Matched: “…E ECONOMIC COMPETITIVENESS BY REPEALING THE THROWBACK RULE. HB1501 Beaty Jr. TO ADOPT FEDERAL INCOME TAX LAW REGARDING DEPRECI…”
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TO ADOPT FEDERAL INCOME TAX LAW REGARDING DEPRECIATION AND THE EXPENSING OF PROPERTY; AND TO … | Beaty Jr. | Died in House Committee at Sine Die adjournment. |
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HB1538
· 1 mention in agenda
Matched: “…SSETS TO THE AMOUNT ALLOWED UNDER FEDERAL LAW. Page 3 of 5 HB1538 Ray TO AMEND THE LAW CONCERNING THE NET OPERATING LOSS INCO…”
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TO AMEND THE LAW CONCERNING THE NET OPERATING LOSS INCOME TAX DEDUCTION; AND TO INCREASE … | Ray | Died in House Committee at Sine Die adjournment. |
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HB1540
· 1 mention in agenda
Matched: “…ARD PERIOD FOR THE NET OPERATING LOSS INCOME TAX DEDUCTION. HB1540 J. Mayberry TO AMEND THE INCOME TAX CREDIT AND THE INCOME T…”
|
TO AMEND THE INCOME TAX CREDIT AND THE INCOME TAX DEDUCTION RELATED TO MAINTAINING, SUPPORTING, … | J. Mayberry | Died in House Committee at Sine Die adjournment. |
|
HB1665
· 1 mention in agenda
Matched: “…SUPPORTING, AND CARING FOR AN INDIVIDUAL WITH A DISABILITY. HB1665 Wardlaw TO REPEAL THE CREDIT ALLOWED AGAINST THE INSURANCE…”
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TO REPEAL THE CREDIT ALLOWED AGAINST THE INSURANCE PREMIUM TAX FOR ACCIDENT AND HEALTH COMPREHENSIVE … | Wardlaw | Died in House Committee at Sine Die adjournment. |
|
HB1670
· 1 mention in agenda
Matched: “…ED ON THE SALARY AND WAGES OF THE EMPLOYEES OF THE INSURER. HB1670 L. Johnson TO CREATE THE PRECEPTOR TAX INCENTIVE PROGRAM; A…”
|
TO CREATE THE PRECEPTOR TAX INCENTIVE PROGRAM; AND TO PROVIDE INCENTIVES FOR CERTAIN MEDICAL OR … | L. Johnson | WITHDRAWN BY AUTHOR |
|
HB1671
Act 1007
· 1 mention in agenda
Matched: “…ARE LEARNING TO BECOME MEDICAL OR COUNSELING PROFESSIONALS. HB1671 L. Johnson TO AMEND THE LAW CONCERNING THE GROSS RECEIPTS T…”
|
TO AMEND THE LAW CONCERNING THE GROSS RECEIPTS TAX; AND TO CREATE A GENERAL SALES … | L. Johnson | Notification that HB1671 is now Act 1007 |
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HB1674
· 1 mention in agenda
Matched: “…X EXEMPTION FOR SALES TO QUALIFIED NONPROFIT ORGANIZATIONS. HB1674 L. Johnson TO CREATE AN INCOME TAX CREDIT FOR CONTRIBUTIONS…”
|
TO CREATE AN INCOME TAX CREDIT FOR CONTRIBUTIONS TO CERTAIN RURAL HOSPITAL ORGANIZATIONS; AND TO … | L. Johnson | WITHDRAWN BY AUTHOR |
|
HB1687
· 1 mention in agenda
Matched: “…ERY AND PARTS AND SERVICES PURCHASED TO REPAIR A GRAIN BIN. HB1687 K. Moore TO PROVIDE THAT A WATER AUTHORITY IS EXEMPT FROM A…”
|
TO PROVIDE THAT A WATER AUTHORITY IS EXEMPT FROM ALL EXCISE TAXES. | K. Moore | Died in House Committee at Sine Die adjournment. |
|
HB1732
Act 878
· 1 mention in agenda
Matched: “…IDE THAT A WATER AUTHORITY IS EXEMPT FROM ALL EXCISE TAXES. HB1732 Vaught TO INCREASE THE AMOUNT OF THE INCOME TAX DEDUCTION A…”
|
TO INCREASE THE AMOUNT OF THE INCOME TAX DEDUCTION ALLOWED FOR A TEACHER'S CLASSROOM INVESTMENT. | Vaught | Notification that HB1732 is now Act 878 |
|
HB1775
· 1 mention in agenda
Matched: “…L PROPERTY AFTER A SALE OR OTHER TRANSFER OF REAL PROPERTY. HB1775 Lundstrum TO PROHIBIT THE SEPARATE VALUATION AND ASSESSMENT…”
|
TO PROHIBIT THE SEPARATE VALUATION AND ASSESSMENT OF AN ACCESSORY DWELLING UNIT FOR PURPOSES OF … | Lundstrum | Died in House Committee at Sine Die adjournment. |
|
HB1787
· 1 mention in agenda
Matched: “…TAX DEDUCTION ALLOWED FOR A TEACHER'S CLASSROOM INVESTMENT. HB1787 Warren TO PROVIDE AN INCOME TAX EXEMPTION FOR CERTAIN RETIR…”
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TO PROVIDE AN INCOME TAX EXEMPTION FOR CERTAIN RETIREMENT BENEFITS RECEIVED BY LAW ENFORCEMENT OFFICERS … | Warren | Died in House Committee at Sine Die adjournment. |
|
HB1822
· 1 mention in agenda
Matched: “…TAX, AND THE ELECTIVE PASS-THROUGH ENTITY TAX. Page 4 of 5 HB1822 Underwood THE OVERTIME BUT NOT OVERTAXED ACT. Page 5 of 5”
|
THE OVERTIME BUT NOT OVERTAXED ACT. | Underwood | Died in House Committee at Sine Die adjournment. |
|
HB1907
· 1 mention in agenda
Matched: “…FITS RECEIVED BY LAW ENFORCEMENT OFFICERS AND FIREFIGHTERS. HB1907 Lundstrum TO AMEND THE INCOME TAX DEDUCTION FOR DEPRECIATIO…”
|
TO AMEND THE INCOME TAX DEDUCTION FOR DEPRECIATION AND THE EXPENSING OF PROPERTY; AND TO … | Lundstrum | Died in House Committee at Sine Die adjournment. |
|
HB1910
· 1 mention in chapter
Matched: “HB1910 Lundstrum TO ALLOW A DEDUCTION FOR CERTAIN QUALIFIED BUSINE…”
|
TO ALLOW A DEDUCTION FOR CERTAIN QUALIFIED BUSINESS EXPENSES UNDER THE INCOME TAX ACT OF … | Lundstrum | Died in House Committee at Sine Die adjournment. |
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- October 2, 2026
99 HB 1738 HB 1750. HB 1804 HB 1698. HB 1702 HB 1807. SB 412 SB 503. HB 1809. HB 1685 and HB 1636. So we're gonna be in here a little while
today, so y'all get
yourselves comfortable and with that representative Pilkington, if you're here, if you'll go down and introduce yourself for the record and you'll be recognized to
Representative Aaron Pilkington
Unverified
1:01
concur on your amendment. Thank you, Madam Chair. Representative Aaron Pilan District 45, Johnson and Pope County. I've just got to concur in the Senate amendment and it just uh deleted some language that wasn't needed and we're good to go. No opposition to it. Thank
Representative Robin Lundstrum
Unverified
1:15
you. Me motion to pass. Any questions?
No questions to have a motion do pass as
amended. I have a motion do passes I mean any discussion, seeing none, what's the members. Say aye. Congratulations
this fast. Senator Tucker, if you'll come down to the end
of the table and please recognize yourself, introduce yourself and you'll be recognized. Thank you very much, Madam
Chair, members Clark Tucker, Senator District 14 members, and this is one that we can take a vote on just for the record. Thank you. OK, Senator Tucker, you're recognized.
Senator Clarke Tucker
Unverified
2:17
Thank you, Madam Chair. With your permission, I'd like to ask Mr. Dan Andrews to come sit with me at the end of the table. More than welcome to.
Members, this is a this is a bill that we can all feel good about voting for. Um, I'm going to have Mr. Andrews kind of tell, explain what he's trying to do, which is the impetus for this bill, but the short of it is we're working to set up a 529 education accounts uh for kids on a, on a broader scale basis than just someone in your own family, and we're doing it in a way that protects their uh confidential information and um in a way that still empowers parents to have decisions over their kids's future. So, um, with that, I'm gonna ask
Uh Dan
Unverified
2:59
Mr. Andrews to kind of tell his story. Please introduce yourself for the record. Thank you. My name's uh Dan Andrews, and I'm here on behalf of the Grow Foundation. You're recognized. Thank you. So as Senator Tucker mentioned, uh, Grow Foundation is established to set up 529 accounts for every student in a in a given population in, in our initial case that would be an elementary school in Jacksonville,
Arkansas, um, we're are going there and setting this up alongside an education program to teach them um economics and a basic level and helped them understand the value of of growing assets and and saving for college and things of that nature. What we found is we started this program is um there's really not a great way for us to um get their information and set it up into a 529 account, um, that really protects their, their privacy and information and so uh we approached Senator Tucker about um making a change so that
we could identify a population and allow that that particular school or group of people to transmit their information directly to the state treasurer's office rather than have to work individually one on one with us to gather their name, Social security number and things like that because um the school that we're working with was very enthusiastic about doing this, um, but there are restrictions on the information that they can share with us and so what this allows us to do is to go in there and rather than having to go and gather signatures from every single parent, um, in the
school allowing this to happen, um, which we initially started to do, but unfortunately, um, the studies showed that that would leave probably the the students that most need access to this program. Um, out of the loop on this and so this allows the school to directly work um with the treasurer's office to establish these accounts and then we can go about um funding that for them from the charitable foundation, um, and letting that, that grow for them. So that's so uh Mr. Andrews came
Senator Clarke Tucker
Unverified
5:03
to me he's a constituent and and we went to the treasurer's office. We've worked extensively with the treasurer's office to get this language right. They are in support of the legislation and there's folks from the treasurer's office here this morning who are happy to testify or answer any questions on this, but, but you know, what this does is, you know, again, in a nutshell is they've targeted an elementary school and they want to start a 529 account for every child in elementary school, which is a really wonderful thing and this enables them to do that, um, in a way that's efficient, um, the foundation, even though they will be giving
money to these kids 529 accounts, they'll have access to none of their confidential information, uh, like the Social Security number or, or date of birth or anything like that. Uh, if you start a 529 account for your own child, you have to provide all of that information to the treasurer's office anyway, and the treasurer's office will handle the information for these 529 accounts in the exact same manner as they would if you were setting at 529 account up for your own child. child or grandchild or or whoever. So all of the confidential information will be treated exactly the same. It's
just, uh, gives again the foundation the ability to work with the school and the treasurer's office to set these 529 accounts up for these kids and uh you know, it's in the legislation that parents have an opportunity to opt out if they choose. So, you know, we, we still do have that parental choice accounted for in the bill. So that's, that's really what the bill does. I'm, I'm happy to answer any questions. Members, do I see any questions? Seeing none. Thank
you. I see no one signed up to speak for or against this
bill. Is there anyone in the audience who would like to speak for or against the bill. Saying none, Senator, would you like to close for
Senator Clarke Tucker
Unverified
6:41
your bill? Yes, madam Chair, I think it's understood, or else y'all wouldn't be taking a vote, but I just wanted to say too, there's no fiscal impact on this. There's no money from the state, so, um, we really feel great about this bill and thank you very much for your time. We appreciate, we'd appreciate a
good vote. Thank you. Have a motion to pass. All in favor say aye pose, say no. Thank you. Your bill is passed.reciate you being here. Thank you
Senator Clarke Tucker
Unverified
7:02
very much, Madam Chair. Thank you, members. Thank you. Representative McCullough.
Are you in the room? Not seeing her, we're going to move on to Representative Crawford. Are you here? OK, if you'll go to the end of the table and please introduce yourself. Yeah House Bill
Representative Cindy Crawford
Unverified
7:32
1738. Hello, Madam Chair, uh, Cindy Crawford District 51.
Thank you. You're thank you. May I bring um an expert witness with me. Yes. Thank you Madam Chair and members, uh, I have with me, Lieutenant Colonel retired US Army. He's also the secretary of the Arkansas Veterans Coalition, John Posey. Uh, so I'll start
out and then I'm gonna turn it over to him, um. Members, um, those who know me know where my heart lies and my heart lies, of course, with the innocent children and next with the veterans. So today I bring before you House Bill 1738. It's uh an act to amend the law concerning benefits provided to disabled veterans to provide sales and use tax exemption for
disabled veterans, uh. Just wanted to share a little bit that people don't realize that a large number of veterans, um, who are disabled. Live in poverty and um John Posey knows more about that than I do, so I'm gonna turn it over to him. Thank you, Representative
Speaker 41
9:04
said, I'm here representing the Arkansas Veterans Coalition, which is a
coalition of uh uh Maine Veterans service organizations like American Legion, DAV, uh, Veterans of Foreign Wars, uh, and we rep and we have also other community partners like Gold Star families that are members of our organization and uh we, we represent roughly, we estimate around 500,000 of the veterans military active retired, and their families and dependents, um, this bill was a direct result. a retreat of veterans last July at, at the Rockefeller Center. We had veteran delegates from
all over the state, from all corners, Jonesboro, Mina, um, Little Rock, uh, Fayetteville area, uh, mountain home area and each delegate was to bring uh issues that they could uh possibly we could approach the legislature with to help veterans in Arkansas and uh so we we had 25 delegates, we narrowed these uh 25 issues down to the top 5, and this issue was actually number one in priority for the Arkansas Veterans Coalition. Um. Who are 100% disabled veterans. I'll try to speak through this
quickly. I know you have a lot of business, um, but the, the, the definition of a 100% disabled veteran is already codified in Arkansas law when it comes to the homestead property tax exemption. But in simpler terms, these are service members, um, to the VA has determined are totally impermanent 100% physically, uh, uh, disabled, uh, through training, combat accidents, or other injuries, um, these veterans leave military service. with these debilitating injuries which renders them a lot of
times in most cases unable to pursue any other work or careers after that, um, there are, there are men and women that have sacrifice their health, their quality of life, and their life longevity in service to our nation, um. They are mainly enlisted junior enlisted, non-commissioned officers. There are officers in there, but not many. Um, they are the ones that are the tip of the spear. They're typically army and Marine Corps, although the other services are recommended uh represented by Army and Marine Corps are the
most prevalent of 100% disabled veterans. They're the, they're the ones in closest proximity to the enemy, um. They're not senior officers. They're not folks that have military retirements by and large. Usually the VA disability is their only income, maybe Social Security if they qualify for that. Um, do other states provide similar exemption? Yes, our neighbor to the west, Oklahoma has had this loss since 2006, uh, and then they they further amended it and extended it to the spouses and the unremarried surviving spouses
of, of uh uh 100% disabled veterans that have passed on, um. The fiscal impact, I'm, I'm sure you'll be very aware of that, uh, you know, there are lesson, there's probably close to 8500, 100% total and permanently disabled veterans in Arkansas and uh 48.8% of all the veterans in Arkansas are over 65, so the veterans are aging out, uh, in, in, you know, all over the country, you know, the World War II veterans are all but gone. The Vietnam veterans are aging out and then the Desert Stormer right behind them. So this law
in our mind is targeted for the Iraq and Afghanistan veterans. younger veterans that are, that, that are here today. Um. You know, there have been some opposition and, and, and we understand that, you know, one would be, uh, we had heard or I had heard the retailers association might be against this, uh, you know, Oklahoma's had this for going on 20 years, um, the point of sale, uh, registers or computers, if you will, have, have the capability to carve out things which they already do in Arkansas even for uh veteran discounts on Veterans
Day or other uh discounts uh from organizations that are already tax exempt in this state, so, um. You know, it seems like that is something that you know in a computerized age could be overcome, um. You know, why should we support this bill, um, you know, our nation makes a contract with the young people of this country and we have enjoyed an all volunteer force since, since the Vietnam War, since after the Vietnam War, uh, everything we can do to strengthen that contract with our youth. When we tell our
youth, you know, we want them to be all volunteers, you know, draft works, but it doesn't work as well as an all volunteer force? No. So anything we can put in our kit bag to say if you join and you volunteer and you have to go to combat. And you get hurt and you come home, we've got your back, especially in the state of Arkansas, um, you know, I it, it kind of uh The one thing that I that I kind of bristle at is it seems as though veterans in Oklahoma are valued more than in other states around them because they've been
extended this benefit, um, it is expensive and I know fiscal responsibility is what this body has to do, but is it expensive in the grand scheme of things, you know, what's the price of freedom, um, you know, 29 million or whatever year that I may have seen in the DFNA estimate, um, that, um. I don't know, it just, uh, you, you gotta put a price on everything, I guess, but um The Arkansas Veteran Coalition statewide membership, we respectfully ask you to support this bill. I know you don't, won't be voting on it today to help honor those veterans that
are suffering physically already mentally and then financially in a lot of cases and uh to quote a friend of mine, um, this is not a matter of money, but it's a matter of priorities and it's the right thing to do. Thank you
Speaker 45
14:32
very much. Thank you. Any questions, members? Appreciate
you coming down. Um, Members, do we have any questions for Representative Crawford? Uh, seeing and we do have one person signed up to speak for the bill. If you will come down
to the end of the table and introduce yourself for the record,
and you will be recognized. And
Mark Diggs
Unverified
15:08
it's Mr. Mark Diggs. Thank you, Madam Chairman and members. Excuse me. To get situated. My name's Mark Diggs, um. Although I'm the immediate past
president of the Arkansas Veterans Coalition. And I'm the current chair of the Arkansas Veterans Coalition Government Affairs Committee, some of you've already seen me here supporting other bills. I'm not here to represent them. And although I'm a lifetime member of the BFW DAV. Military or the Purple Heart. And Vietnam veterans of America. I'm not here to represent them. I come to represent.
100% disabled Arkansas veteran. I'm one of them. This bill directly impacts and benefits me. And Veterans like me. I'm a combat veteran from uh Vietnam. Uh, I'm one of the few officers that uh This impact, although there's others. I've got 2 Purple Hearts. Ron Star Several other valor awards if you go to the treasurer's
office. And look at the Arkansas Military Veterans Hall of Fame. Uh, display pretty closely. You'll see my name. So Um I feel Appropriate to speak to this. Now I've had the pleasure of working with A couple of representatives on this. Uh Committee Representative Wing Representative. Uh, I noticed that.
None of the according to the records, none of the representatives here are veterans, but I suspect most of y'all have relatives of our veterans or children or brothers or sisters or mothers or fathers. And so there's a strong Support system. For veterans in this state and I'm appreciative of it. And I know There's a tendency in this committee is responsible for making sure there's a balanced
budget under the Constitution and you have to People are fighting over all of the exemptions and monies and things of that nature and y'all have a awesome responsibility. To be good stewards as best you can. And there's a lot of people. That are asking you for a lot of things. But I'm gonna say Quickly that this is not about money. Uh, as a Vietnam veteran when I came home. Uh, we didn't get a welcome home. We didn't get the parades.
We tried our best to actually hire our service and our resumes because we were just dying. Fortunately, over time, people were able to separate an unpopular war. From the veterans of honorably. And we made a pledge and when Iraqi Veterans and Afghan veterans and others that came home we were the ones that made sure they got the parades and stood up for them. We didn't want them to come back like we did.
And so, This bill is about. Honoring the sacrifice and service of veterans. It's not about money. But I can tell you this. That Veterans like me look to this state and the policies it sets. And when there's an opportunity to help. Recognize the sacrifice and services of veterans. We look pretty close. We may not say much. But I would
say that Vietnam veterans Like me We are going to be looking to say, are we going to get another insult? Because that's the way we look at it it may not be fair. It may not be right, but that's the way it is. And so as a Vietnam veteran. It's not just for Vietnam veterans, we're dying off 400 today. If you look at the demographics collapse of the state, half of us are gonna be gone within 10 years. I'm way past myself by date. And uh
But I'm gonna try to hang around as long as I can. But uh Veterans bring in $4 billion of economic impact to this state because of the federal dollars that fall fall them through GI Bill home loans, pensions, retirements, uh, the VA healthcare assistants and so forth. That's $4 billion that they bring in that we don't have to have taxes to raise for in this state. And when you look at the financial impact of whatever it is, 17 million, it's going to be
decreasing rapidly, dramatically, so whatever it is today is going to be less next year. But it's a rounding era when you consider the value that veterans bring to this state and I respectfully ask this committee to consider those things on voting for this bill. Thank you. Thanks for coming. Members, we have any questions? See you
then, thank you for your testimony. I don't see anyone else signed up to speak for against
the bill. Is there anyone else who would like to speak for against
the bill? See then Representative Crawford, would you like to close for your bill? Yes, thank
Representative Cindy Crawford
Unverified
20:45
you, Madam Chair. You guys have heard from some of the greatest and um the physical impact is heavy. I'll agree. I don't agree with it. I'll let you know that. I do not think it's gonna be that much, but we have to depend on what's been put before us as you make your budgets.
But I would ask that if you see a surplus. If you see that the budget is gonna be softer rather than just really, really tight. I ask you to consider this as one of your top priorities. They are great people. They are why we are here today. They are why we are free today and that is why I choose to support the veterans and I know you do too. Thank you.
Thank you for presenting today. Appreciate you being here, uh, members, we're gonna go back up to HB 1699 representative
McCullough. If you will, introduce yourself for the record and you
Representative Tippi McCullough
Unverified
21:58
will be recognized. Uh, good morning, committee. Representative Tipy McCullough, District 74. Um, bringing to you this morning HB 1699. This is a bill that has
come up out of some of the middle, I'm sorry, I'm gonna go
Representative DeAnn Vaught
Unverified
22:15
ahead and representative Bots here with me now. Representative DM District 87. Sorry, I was running from
Representative Tippi McCullough
Unverified
22:21
education. Um, we're bringing 1699 today. This is one of our bills that has come up out of our mental health working group, um, this is a, uh, bill that has been done in a couple of other states in Tennessee and Texas, as a matter of fact, in Tennessee, they started it out um as a small um exemption, and now it's
a year round exemption in Tennessee, but the reason um we're bringing it is that this is a really proactive way for us to have um safety device. glasses and storage devices for um gun owners to firearm owners to when they go in to buy their firearms, um, to go ahead and get these devices to help keep them safe and that's, that's safe from children that might be in the house that's safe, um, from somebody who might be considering suicide at the time,
um, veterans, anybody having a mental health crisis just a way to keep these uh firearms safe. This is a short period of time in August when we have other tax holiday and with our school supplies and um it does have a uh. fiscal impact as you, I'm sure you've seen and um I uh I think every bit of that would be, be worth us um paying to uh be able to keep some of our, our citizens safe.
Representative DeAnn Vaught
Unverified
23:44
bought would you would also say that um it would probably also help
us sell more of those and keep more people safe, uh, so I know it has a little bit of a physical impact, but in, in reality, we can't put um A cost
on people's lives and I do think that it would help us um sell more of them. Thank you. Members, do we have any questions?
See none. I don't have anybody signed up to speak for or against this bill. Is there anybody in the audience that
would like to speak for against the bill. CNN Representative McCulloch, would you
Representative Tippi McCullough
Unverified
24:20
like to close for your bill? Uh, yes, um, I'm, I'm, I I believe I'm closed. I think we, we said what we needed to say. It's a pretty simple thing just to try to add some some safety components to this. We know that most firearm, um, owners are, are safe and do this, but for the ones that aren't or the ones that this might help incentivize. We just want to add a way to give them a little incentive to do that and I believe. Do you want to and I would concur with that, um.
Representative DeAnn Vaught
Unverified
24:47
We've been on that mental health group now for. Going on to our 5th year now, and this does come up quite often like if uh if a child in the home was suicidal, the mom and dad could actually lock up the guns and they thought that this might be something that would help, uh, during those crisis times. Uh,
Representative Tippi McCullough
Unverified
25:09
so with Also in August, that's a little bit right before hunting season also, so we, we, we know that a lot of hunters especially are
really good with firearm safety, but once again, just another added component to help, to help with that, keep that in people's minds and um we wanna um thank DFNA for, uh, working with us on trying to figure out the best aspect to attack this from and to um and helping us with all that. Thank you. Thank y'all
for presenting. I appreciate it. Uh, members, the next bill is gonna be HB 1750, which is mine, so I'm gonna have co-chair chair.
too bad. All right, committee as a reminder, this is House Bill 1750. Representative Kavanaugh, when you're ready, you may introduce yourself and proceed with your presentation. Thank you, members.
This is another bill, as y'all know, does have a
physical impact. We won't be able to vote on it, but I really want to present it because I think it's something that we need to talk about. It's another thing like property tax, but this is the repeal of the franchise tax law. Um, this is a tax on businesses just for being a business that they pay every year. And it's the best way I know to describe it. And it's really detrimental, I think, to business growth in Arkansas. It's another one of those regulations that we really don't need. Um, and with that,
I'm opening up for discussion. All right, members, you've heard an explanation of the bill to take questions. Representative Lungstrom, you recognized for
Representative Robin Lundstrum
Unverified
27:02
a question. Yes, thank you. I'll be up front. This is probably one of my favorite bills of the session, and my husband loves you for putting it in and mad at me for not getting it done first. So that with that said, Has anybody ever calculated the expense to businesses. For doing these forms and how much it costs on a daily basis for this extra government regulation.
No, but I can tell you as a business owner with multiple uh businesses, how much effort and time it takes on our end and then it's substantial. I mean, to actually file, make sure you don't miss the deadline. If you miss the deadline, you've got to go back in and do something else and it creates a whole unneeded regulation on small business. It, it, it, it's be honest with you, it's very much a nightmare if you miss paying a franchise tax. If you pay it on time, you're great, but when you miss it, it creates a
Representative Robin Lundstrum
Unverified
27:53
web of stuff you go down. Yes, it does, um, I, I do wish someday we would calculate the expense to business for all the regulations that we do, and this is one where we can get this done this session.
Wouldn't you agree? I would agree that we hope that we could get this done today, but
I know we can't, but also the one thing to me that is also a cost is we don't think about it is, what is the cost of the minister this in the state. I mean, how much money are we spending to administer this, sending out the little cards, reminding you to pay it and all,
and all that information. I think we'd find out there was a substantial savings of not having to do that any longer. I couldn't agree more.
Representative Robin Lundstrum
Unverified
28:30
Thank you for bringing this bill. All right, Representative
Eaton, you're recognized for a question. Sure, thanks. I understand if we take the
Representative James Eaton
Unverified
28:38
money away, um, is there any tracking associated? Would you still be required to update the Secretary of State if you have a franchise, if you are incorporated or anything like, does that change any of that the Secretary of State's office did
approach me when they saw my bill and asked that if we do decide to pass this out
that we do an amendment that would actually just allow people to go in once a year and make sure that their officers are correct and also that their person. That's on record for file will be able to be corrected. And that
Representative Les D. Eaves
Unverified
29:15
would be pretty simple. That's Representative Eaves, you're recognized for a question. Thank you. Um. Can the education adequacy fund. Handle losing $28 million.
I believe it can. Representative Kavanaugh, I know there's, there's many states around the country that
don't have a franchise tax, um, have you looked at uh the states around us and states in our region or across the country, can you speak to that at all? I
mean, when we looked at it originally, I mean, I think we're really one of the outliers that's gonna have franchise tax. I mean, it's something that's been going away, um and just for everybody to know this, we didn't have a franchise tax in 1979.
I know that sounds like a long time ago for some people, but in the history of the state, it's not that long ago if you think about it. So, I mean, it's a, it's one we put
on ourselves, you know, in the 20th century, it's the 21st now. Let's hope we can find a way to
take it away from small businesses. Thank you very much for that. I agree we're in the distinct minority of states that levy this tax. Representative Wootten, you're recognized
Representative Jim Wooten
Unverified
30:22
for a question. Thank you, Mr. Chairman. Chairman Kavanaugh, I
I have to pay this franchise tax, and I have to go through all the hoops in order to pay it. But I'm concerned about the $28 million that were taken away from education, adequacy fund reduction of $28 million. It's not the fault of businesses, but it's just the fact that we've created this situation and directly impacts public education and we, we give.
65 million this year to uh education, freedom accounts and only 32 million to the Department of Education for Secondary education and like representative Es, I'm concerned about the loss of 28 million more we're already giving away over 200 million this year are at 200 90 million has been set aside and 90 million has been approved. My question is
how do you feel that um the education adequacy fund can sustain a $28 million reduction. Is that not, would that not be in violation of what the court order states that we must address the adequacy funding. I don't think so. I think if you
look at the adequacy funding account balance is large. It stays large. It's always got a big balance in it, way above 28 million, way above what we need to adequately fund education. And
And now as you're brought out, we're by the law to fund education adequately. It doesn't say you have to have a fun to do it. It says you must fund education adequately. And so I think that that's something that still can be done even when you have such a surplus inadequacy fund. You can still fund education properly. And you know as well as I do, I'm a big supporter of public education, public education, although while we've got school choice, public education was
where the vast majority of our children are going to be educated and I think we all want a strong public education. But I also think that it can be done both. You don't have to have one or the other, as you well know, is sitting in. and understanding the word process we're at, we have to fund public education first
Speaker 95
32:55
before we fund anything else. All right. Thank you,
Mr. Chairman. Thank you, Ms. Kavanaugh. Representative Kavanaugh, do you, do you or does anyone else
know the history of how this, uh, the, the receipts from this tax got linked to educational adequacy. It seems like it would just go into general revenue, but at some point someone Must have
earmarked it for that. I'm not DFA might be able to give a better history on that. I'm not familiar with that. I know y'all think I've been here since '79,
Speaker 106
33:26
but I really haven't. I'm not that old, but I was definitely not insinuating that.
I, I see, um, some head shaking that no one, no one's for sure
over on the DFNA side, so maybe that's something
we'll have to research, but I mean, I think
Speaker 109
33:45
it's something we need to talk about, so Representative Wootten may know. Well. I pray you. He was he was signaling to me
Representative Jim Wooten
Unverified
33:52
that he wanted to chime in. I was not war has been made numerous times before the education committee. It doesn't seem to rest her. The adequacy funding is a result of the federal court ruling that
said we must do this several years ago. And uh so that's the history. I mean, it's, it's short, very clear, very to the point and uh let me make this point, you can't take In, in the ending final analysis of the education of freedom of accounts. You cannot take $400 million out of the education fund are 400 million out of
general revenues and it not the impact, the amount of money that you're putting in public education. I've said enough. Thank you.
All right, Representative Lungstrom, you're recognized. Thank
Representative Robin Lundstrum
Unverified
34:46
you. Um, this tax has been imposed on businesses for 51 years. The thank you note we should give to these businesses to stop doing this tax because it's also an over regulation as well. So I thank you for bringing this. I, I think it's time we actually look at both sides of the coin. We talk about education
adequately, yes, adequacy, education is going to get funded, but it's also time to talk about Overtaxing businesses and over regulating businesses, and I'm thankful that you brought this bill. And I would say, wouldn't you agree, but I'm gonna count she would. Alright, are there
any further questions from committee members? OK, seeing none, I'm looking at the sign-in sheet. I do not see anyone signed up to speak for or against the bill. Is there anyone that I missed? OK, seeing none, Representative
Kavanaugh, you're recognized to close for your bill. Thank you, members. I mean, this is another one, of course, we know we won't vote on because of the financial impact, but it's something that we need to think about. It's something that we need to find a way of a goal toward going toward nobody wants to not fund public education. I don't think that getting rid of this is actually not going to fund public education in my opinion. I think we have the money already in education department to be able to continue that funding, um, I think this. It's just a way to look at
making regulation less on businesses, make Arkansas more business friendly, and we all know that as we make Arkansas more business friendly, and we bring in more income. There will be more money to fund education. With that, I'd appreciate a good vote at some point. Thank you. All right. Thank you,
Representative Kavanaugh, um, at this point, she and I are going to uh switch spots and I'm gonna run House Bill 1804.
Representative Ray, if you're introduce yourself for the
record, please. Thank you, Madam Chair, David Ray, State Representative District 69, uh, with your permission, Madam Chair, I'd
Speaker 122
37:01
like to allow my guests to introduce himself. You're recognized. Good morning. I'm Anton Jannik. I'm a partner with the Mitchell
Williams law firm here in Little Rock, Arkansas. All right, colleagues, this bill is on everyone's favorite
topic, vegetation management. Um House Bill 1804 clarifies that
vegetation management activities in utility ride of ways are not subject to the sales tax. The tax policy reason for this bill is that this is a business input, um, inputs are typically exempted because if you don't, you end up with what economists refer to as tax pyramidding, where a tax is paid at each stage of production and it just raises the final cost of the product. So in this case, what that looks like in reality is higher utility bills for you and I and all of our constituents.
Um At some point, uh, DFNA changed their interpretation about how these sorts of services were treated for tax purposes and um there's some discrepancy there, there are varying opinions, I guess I will say, um, about whether that
interpretation is correct and so um at that point, at this point, I'd like to invite my guests here to Mr. Janne to explain that issue in more detail.
Speaker 122
38:25
So vegetation line management services refers to the activity of removing trees and brush and
Speaker 125
38:30
other vegetation that encroaches on power lines, including transmission lines at power substations and in our neighborhoods. The focus of that work, that removal work, is to prevent power outages. Since 1992. The service of removing trees and brush has been exempt from sales tax. Recently, TFA has begun focusing on other activities that are
part of that vegetation line management service. That are necessary and appurtenance to tree and brush removal and seeking to tax them. This includes the trimming and chemical spraying of vines like kudzu. That encroach on and can obstruct power lines and the spraying of stumps of trees that could regrow. The DFA has also focused on the use of certain equipment. Used to perform the non-taxable work of tree and brush removal like bush hogs or brush hogs and
other large equipment referred to in the industry as mowers, although that equipment doesn't. I can't be used to mow grass and isn't. That equipment is used to use to take down non-taxable trees and brush. This bill seeks to exempt those ancillary incidents of tax that occurred during the vegetation management services provided for utilities, namely. Exempting the clearing of such rights of way by any mechanical or manual means, including by brush hogging and removal of
that debris. As well as exempting chemical and herbicide applications or spraying of stumps that can regrow and the spraying and trimming of vines or other weeds that encroach on power structures. Our discussions with industry indicate that this activity has only recently and sporadically been treated as taxable lawn care under the DFA's assertion that this is like this is taxable maintenance of ground covering. Our historical research indicates that these activities
have been treated as non-taxable in the past. We note two tax opinions drafted by Mr. John Tice. Who prior to his retirement and return as a revenue legal counsel was the assistant commissioner of policy and legal at DFA. In 1 2018 opinion, one taxpayer asked if the spraying of a chemical to retard the growth of vegetation and pipeline and utility rights of way was taxable. Mr. Tice found that sprang a right of way to clear
away vegetation is not a taxable service. Later in that opinion, he says, quote, a review of your client's activities in light of the law and rules cited above reveals that your client's services include the application of chemical spray to retard growth or eliminate growing vegetation does not come within the definition of landscaping. Landscape includes the installation, preservation, or enhancement of ground covering. The chemical services provided by your client to clear
vegetation, do not install, preserve, or. pants, ground covering. Accordingly, those services fall outside the scope of taxable landscape activities. In another 2018 opinion, the taxpayers' business took big mulching machines, two properties to grind up trees and turn them into mulch, leaving that on the property. The machine that they used was described as a big bush hog. The taxpayer provided photographs of the work they did. And asked if that was taxable. In that opinion, Mr. Tice wrote,
quote, the services demonstrated in the photographs you provided are neither lawn care nor landscaping services. Instead, those photographs demonstrate that the taxpayer is clearing a site, the bushes and trees, which is specifically exempted from the definition of landscaping. Additionally, the services demonstrated in the photographs are not taken to maintain, preserve, or enhance ground covering. Instead, these services are focused on the removal of bushes and shrubs from the. property, and accordingly the service services illustrated in
those photographs are also not law and care services. Finally, in another DFA opinion, this one drafted in 2002. Ray Howard He later became an administrative law judge at the Office of Hearing and Appeals at DFA. He was asked the following question in a request for a legal opinion. Question Is it correct that maintenance
slash cleanup of non-lawn, non-landscaped areas, i.e., brushy areas, woods, unkempt grassy areas like pastures, etc. by mowing, trimming, brush hogging, etc. is a tax-exempt service response yes. But in recent times, DFA is taking the opposite position. That this activity is taxable, including, for example, that using a brush hog to perform the non-taxable trees and uh brush removal turns that non-taxable activity, taxable.
That's very confusing for the marketplace. It's hard to predict exposure and even harder to comply when the approach to taxation is changing under your feet. This bill seeks to remedy that by making all that vegetation removal activity by all manual and mechanical means non-taxable, not just the part that is tree and brush removal. And Arkansas is an outlier on this issue. Outside states do not tax this activity. In fact, Ey tells us that their work in Louisiana and Mississippi and Texas, this vegetation line management
service is non-taxable. Houdini says the same thing in Oklahoma. So Arkansas's taking a position on tax and a new position that isn't found in other states. The hardest thing about this though is who really pays for this. This goes back to each of us, to our moms and dads, our grandparents, those on limited incomes. These additional costs as they're being imposed in this prospective manner. Hit all of us. It'll hit rates.
Speaker 129
44:38
These are additional costs that these utilities will pass through. To
their rate paying customers and that's us for that
Representative Richard McGrew
Unverified
44:52
reason, we ask you to clarify this bill in favor of the utilities work. Thank you Thank you, members. Do you have any questions? Representative Mcre, you're recognized for a question. Thank you, Chair Ma Chairman.
Uh I know a few years ago that energy cut back on trimming because of expenses which resulted in a lot more power outages and all
Speaker 125
45:19
along the line, so by decreasing it and expense, do you think it would allow them to to continue. To do more more trimming. And in the end, uh keep us from having less power outages. Yes sir, I very much do. I think the utilities are very focused on their duties under the law to preserve our power, um, but, but the cost and expense that keeps rising is something that is a constricting factor, um, and that here by reducing that pressure in that manner for very reasonable small incidence of tax helps that situation. It provides more resources to go out and do that hard work of keeping trees and vines out of
the power lines. Thank you. Um, actually, Paul, if you wouldn't mind, I have
a question if you could go to the end of the table, I'd like to ask. And if you don't mind, if you could introduce yourself for the
Speaker 137
46:06
record, please. Thank you, Madam Chair. Members of the committee, Paul Gehing DFA. Thank you. Something he said got
my attention. He said the removal of debris and stuff is not taxable, but once you start using a piece of equipment, it
Speaker 141
46:23
becomes taxable. How is that possible? But there is a, there, um, a levy for the collection and disposal of solid waste, so I'd I'd have to review the exact opinion that Mr. Janni is discussing to see exactly what the context was, but yeah, solid waste is, is a taxable service in Arkansas.
But he's talking about the actual clearing of the area is because what
they're doing there for the clearing is now being taxed. Uh, we all understand when we take debris, we have to pay for that debris, but I mean, The way he described it, it was, it wasn't, if I go out there and I don't use a piece of equipment that's taxable to actually do the clearing, there's no tax, but if I go in and use a piece of
equipment that's taxable, we now say that's a taxable. Right
Speaker 136
47:15
I'm confused. Yes, and so you have um a levy
Speaker 141
47:18
that the General Assembly enacted for landscaping services as well as commercial or nonresidential lawn care, um, that the statutory language that the General Assembly used, I believe those levies were enacted in, in the 1990s was very limited. It deferred to the department to define what those terms meant and what would be encompassed and what is taxable and non-taxable services, um, what we're talking about, particularly in this in
this opinion, we're not talking about landscaping services. We're not talking about planting, um, uh, bushes, trees, things like that. We're talking about. Um Lawn care, which is um doesn't apply to residential law and care only provides to applies to non-residential land lawn care and in the um the definition of long care, it pertains to the the preservation or maintenance of Ground covering, which is very broad, uh, the, the rulemaking
also provides that chemical spraying is, is the maintenance we control is the maintenance. We do understand that on a right of way, there's going to be situ situations where there's going to be both. Vegetation that is That is in the form of weeds, grasses, things like that. There's also going to be trees that that are going to be removed. Um, the rule speaks to that tree trimming is, is, is not long care. So the, the rule is, is the.
The guidance that the department has provided for a particular service. We do understand from time to time a business might be engaged in both taxable and non-taxable. Services when they're doing one set of services for a customer. So it really turns on whether or not that service is that the Businesses performing is a taxable service, and if they are also performing non-taxable services, they have to make sure that they're separating those services out on their invoice to
make sure that the entire invoice is
not taxable. OK, so I just make sure I understand. You think
tree trimming is not part of landscaping, but you think removing debris is
Speaker 141
49:32
part of the landscaping, so there is a um. Landscaping is generally planting. What we're talking about, I think in this bill is what his taxable in Arkansas, which is taxable lawn care of Non-residential property and in our definition of lawn care, tree trimming is not, is not
lawn care, but the issue I think that what comes up is that you've got multiple services being provided for a customer. Of which some of those services are taxable services. Some are not taxable services and the business just has to be very careful not to combine those services into one invoice. They have to separate the non-taxable from the taxable so that the customer doesn't um have is getting charged tax on um a combined invoice when
customer, some of which are taxable, some are not. And and I appreciate speaking about the rule and this, but from Someone who's a business person, what you described is something I can never comply with because I'm not gonna be able to figure out when my employees out there doing a job, if they're even gonna know what they're doing is taxable or non-taxable. So as a business, what I do so I don't get in trouble with
DFNA is just pay the tax, even though I might not have to have the tax too. So I guess what I'm saying is I
think we have a lot of very complicated rules around this area that we might need to look at to make a little clearer. For the taxpayer. In my opinion, I'm just speaking in my opinion, but
Speaker 141
51:04
with that I'll and representative, I, I, I agree there's there's a greater need for clarity in the law as to because when the General Assembly enacted these, these levies of of tax on these services. They didn't provide a great deal of definitions of what would be included and whatnot and left that to the department to do rule
Representative Jim Wooten
Unverified
51:25
promulgation. I appreciate that you're recognized. Thank you, Madam Chairman. Colleagues, I hope you've paid attention to the bureaucracy speech that's been made this morning. It comes back to roost on every one of us. It's totally out of control. I agree with the representative Kavanaugh. Let me ask you a question. I
grew up on a lawnmower that you pushed. In the yard to mow.
Would that be exempt or would it be taxable? The Representative, it would depend on whether or not you were I don't need any more
Depends. I need to answer. I don't need any more of that. I mean, I've heard, I've heard, I've heard all I want to hear
as it relates to depends because that's bureaucracy talk. I want to know, would that be a taxable service
Speaker 157
52:25
only if it's commercial property, only if it's not.
Representative Jim Wooten
Unverified
52:31
Residential property. Another question. So in other
words, If I'm clearing my land. No, I have cleared. And they use a sickle. Lauper. Or some other device that's not mechanical. Then I don't have to pay any sales tax, is
Speaker 157
52:53
that correct? This is non-residential property or residential property. That's,
Representative Jim Wooten
Unverified
53:02
that's the important residential property. You mean that you, you differentiate between cutting a tree with a lopper on commercial property from that of non-residential. Yes, sir. Ladies and gentlemen, I, I hope you, I hope you're listening because that's the bureaucracy total totally out of control. When you can differentiate between lopper used on personal
property and a lopper used on commercial property, uh, that's Thank
you. Thank you, Madam Chairman. I think I hope I made my point. Representative Lynch, you're recognized. I think
Representative Roger D. Lynch
Unverified
53:47
we ought to make it real simple. If you're in business and you're delivering a service or a profit, you pay the tax. Most of us have to. There's a few. Professions that are exempt from sales tax. I don't really agree with that because they're working just like I'm working. I pay sales tax. So,
if you're out delivering a public service to the public and you're charging for it for a profit. You ought to pay the tax like the rest of us. Any other Questions,
members seen none. Don't have anybody to speak up for against the bill. Is there anybody in the audience would like to speak for or against the bill.
CNN Representative Ray, would you like to close for your bill? Well, I just want to thank the committee
for their questions and for allowing me to bring
some attention to this issue. I know this is not something that people stay up late at night, really worrying about a lot of times, but it is important, particularly to the utilities and and to our co-ops, uh, because as it was mentioned earlier, these these costs do get passed along to consumers. I think this is an area of the law that does need to be better defined so that everyone has certainty that we're not one. And really if anything we ought to inverse the exemptions. I'm
not sure why we would want to exempt residential lawn care. I mean, I mow my own grass at my house, uh, where I, where I grew up, if you could hire somebody to mow your grass for you, that was considered a
luxury. I think that if anything that ought to be subject to the sales tax and the business input side of it ought to be exempted, so, um, hopefully we'll clarify this down the road. I appreciate your attention today. I'm
closed. Thank you. Thank you for presenting, um, with that, uh, representative Torres, we're
here if you're here, if you'll introduce yourself for your And you'll be recognized and this
is HB 1698 and as a reminder, we won't be able to take a vote, but
Representative James Eaton
Unverified
55:50
he'll be able to present for us if you only introduce yourself, please. Yeah, thank you, Madam Chair, House members, Randy Torres District 17, Salem Springs. Uh, this, this bill, uh, 1698, uh, is a plan to change the income tax rules and Arkansas for people who use healthcare sharing ministries or other
medical cost sharing programs instead of traditional health insurance. So basically all we're trying to do is just apply the tax exemptions that people get today using health insurance onto these healthcare sharing ministries. So right now when your employer pays your health insurance, that money isn't counted as part of your income for tax purposes. You don't pay taxes on it. This bill wants to give that same tax break to employees whose employers contribute to a
healthcare sharing ministry or similar cost sharing program for them. Here's what it, uh, as far as the um activity around these uh home, uh, I'm sorry, these healthcare sharing ministries. Um, nationally, we don't have any state information, but nationally there was about 200,000 people participating in these in 2010 and today we have at least 1.7 million people that
are participating in this because it's probably more affordable and so forth. So anyway, here's what the bill does, um, tax-free employer contributions if your employer pays for your membership and a healthcare sharing ministry, um. or another medical cost sharing program, that money won't be counted as part of your taxable income. normally extra money from your employer might be taxed, but this would be an exception, and again this is currently being offered to Arkansans that use health insurance, uh, this is a
deduction for employers and self-employed. It also lets employers and their self-employed people subtract the amount that they pay for these programs from their taxable income. This lowers the amount of income that they have to pay taxes on saving them. and consequently putting those savings back into
Representative Randy Torres
Unverified
57:57
the economy. So with that, I'll take any questions. Thank you, members. I
see any questions? Representative Beyton, you're recognized this classified as insurance?
Representative James Eaton
Unverified
58:14
not officially, uh, it's not regulated, uh, but it is an alternative means for people to get their healthcare costs covered. I participating
in this program. I understand that. follow up So with that Are you able to? Takes tax deduction by purchasing insurance and then making additional. Deduction
Chair
Unverified
58:35
by joining this. Program? Well, I, I wouldn't suspect
Representative James Eaton
Unverified
58:40
that someone that is paying or participating in
health care coverage would want to adopt this in addition to that. You know what I'm saying that you'd be like double insuring yourself, which I guess you could do, but it probably wouldn't make sense.
I guess my concern would be if this program that you're going into if If that's my I want to make sure that it's an actual going toward an insurance benefit. Or a benefit, not an insurance benefit, but a benefit coming back to me as opposed to me just donating to said cause in taking
the tax deduction on that side. Yeah. Also, while I have insurance, just double, I'd be concerned about the double abduction there. I,
Representative Randy Torres
Unverified
59:23
I wouldn't suspect that that would be a problem. OK, thanks. You bet. Representative
Representative Richard McGrew
Unverified
59:31
McGrew, you're recognized. Yeah, question just so I understand, my county self-insurers, their employees. So would this affect them? Uh, no, sir. Any other questions?
Seeing none. I don't have anybody signed up to speak for or against this bill. Is there anyone in
the audience would like to speak for against the bill. Thank you.
Representative James Eaton
Unverified
59:58
Representative Torres, would you like to close for your bill? Yes, ma'am. Thank you. Uh, this bill opens the door to more affordable health care options without burdening our taxpayers. It encourages innovation, rewards employers who care about their workers and gives Arkansans more freedom to choose what works for them. This isn't just good policy, it's a
boost to our communities and our economy. House Bill 1698 shows Arkansas is serious about practical people first solutions, and if we vote yes on this in the future, uh, it will make health care better for everyone in our state. And with that I'll close. Thank
you. I appreciate you presenting this to us. Thank you for your time. Um, we're with that
we're gonna jump down. For Representative Dave Davis to
get back to SB 412, which is representative McClure if you'd like to present this one. this is also one that we'll be able to take
a vote on. SB 412. Represent if you'll, if you'll introduce yourself for
Representative Rick McClure
Unverified
1:01:10
the record, you'll be recognized. Rick McClure District 29. This is a very straightforward DFA bill. Uh, we all know about the
uh deduction on our mileage, uh, and the writer always set by the IRS and we're always trying to trail in behind it with the procedures what this bill does is simply allow the DFA to set those rates, uh, so they don't have to keep coming back to us. And so you wonder how far can that go? They have wrote in here if it gets above $1 a mile, the come back and talk to
us. Thank you, Representative McClure. Does anyone have any questions?
See none. I don't have anybody signed up to speak for or against the bill. Is there anyone? oh,
Representative Richard McGrew
Unverified
1:01:57
Representative McGrew, you're recognized. It's a question on this by putting this in their hands, it can allow them to make the deduction less rather
Representative Rick McClure
Unverified
1:02:05
than more, is that correct? Uh, I'll refer to, uh, DFA
to answer that. Paul, if you will introduce yourself again for
Speaker 141
1:02:16
the record. Thank you. Paul Gehring DFA. So Representative McGrew, um, we fully intend through this
legislation to as closely match the IRS rate as much as possible um to uh so that taxpayers can have one rate for their federal return as well as one rate for their Arkansas return. Right now we adopt a mileage rate by rule, um, so under the rule it's entirely possible that we could adopt a mileage rate. Currently it's 54.5 cents per mile. We could certainly by rule reduce that amount. That's that's not our intention. Our
intention is entirely to match whatever the IRS is providing to do that match as quickly as possible. The bill requires us to make that decision within 30 days of an IRS rate change, um, and do it in a manner that is fiscally responsible for the state and for taxpayers, so but definitely that that is our goal. The reason that we can't just automatically match whatever the IRS does is because our constitution limits our Um, our ability to match whatever the Irish is doing without some type of um Government action here it's going to be instead of a rule, it's going to be a proclamation.
The guardrail that has been placed in the bill is that DFA cannot exceed the mileage rate by a dollar. Currently the IRS rate is 67 cents, so it may happen 1015 years down the road that we need to possibly look at raising that dollar limitation, um, but right now we think a dollar would provide sufficient leeway and also
Speaker 149
1:03:43
that that guard guardrail that we could not exceed it. Thank you very much. That's a
Representative Richard McGrew
Unverified
1:03:50
good explanation. So you're full intent is to match the federal
guidelines. Absolutely, yes. Thank you. Thank you, members. Any other questions? Seeing that Representative McClure, would you like to close
Representative Rick McClure
Unverified
1:04:06
for you? I'd like to close for the bill, and since we're able to vote on this one, I am assuming we are voting on this one, is that
correct? Then I make a motion to pass. I
have a motion to pass in the discussion on the motion. See none. All in favor say aye. Paul say nice. Thank you. Your bill has passed. With that members, we're gonna
go back up to Representative Eaves at HB 1807. Represented if
you, if you will re Introduce yourself for the record and you'll be recognized. Representative Eves, we
have your amendment if you will, um, Present that first so we can adopt it.
Representative Les D. Eaves
Unverified
1:05:34
Representative Eves, if you'd like to present your amendment. Representative District 58 members of the amendment is adding several house co-sponsors and the Senate
co-sponsor and has just one line that we had to clean up in the
bill. to a motion to a motion to adopt the amendment. All in favor say aye. Congratulations, you can present
Representative Les D. Eaves
Unverified
1:05:55
your bill as amended. All right. And there may be a point, Madam Chairman, that I'll have someone come up to get some
more information, but colleagues, what this bill is doing is
trying to clarify a situation we have with um the aviation industry, airplanes in particular. The current law allows individuals engaged in selling and leasing aircraft, the option of either paying sales tax upon the purchase of the aircraft held in inventory or paying. tax on the lease portion of the income on that aircraft. So this bill would clarify uh who qualifies for this option. It'll clarify the a long standing definition of who is in the business of buying and selling aircraft to include those holding aircraft in inventory for resale or lease, and it codifies the generally
accepted minimum lease rate of 7.5% um of the acquisition cost of the aircraft and that's an industry standard in multiple states use that definition. The main thing it does, to be honest with you though, it's going to prevent double taxation of aircraft that are held for resale or lease. This is an issue that's permitted more aircraft from being held in Arkansas. I think you'll see on your sheet that it shows a million dollars fiscal impact. That is only if we allow DFA to
double tax that that purchase. Um, you either have to pay sales tax on the purchase of the aircraft or if you have an aircraft for lease, you have to pay sales and use tax on the lease. You shouldn't be required to pay both. In fact, that is the um determination of a recent case in front of the Tax Appeals commission. Um, and I, I really, I want to avoid getting too deep in the legal aspect of that case because it's been appealed to uh circuit court, I think it is,
um, but if you allow I've got Mr. Robbie Wills that can give you some background on that information. Um, I want to note too, Robbie, you want to come on up, um.
Speaker 193
1:07:45
I'll wait till he gets here and we'll go into that some more. Mr.
Willis, if you will please introduce yourself for the record. Thank you Madam Chair. I'm Robbie Wills, uh,
Speaker 194
1:07:59
WSG Consulting. You want to add anything to what I said yes sir, absolutely, um.
So our firm represents a number of stakeholders in this, um, the Arkansas General Aviation Association, aircraft owners and pilots association, which is the world's largest organization representing people who own and operate aircraft. But we also represent the taxpayer in question in this. Tax Appeals Commission case that brought this bill to you, so our client, um, an aircraft with the intent to lease it to a third party.
Uh, they're not an aircraft dealer. uh, so what they did on the advice of their tax professional who followed decades of, of policy here in the state as they set it up as a lease and they have to charge a certain amount per year in lease and then they pay tax on that lease income. Uh, after doing that for a number of years, my client was audited by DFNA. They thought, OK, well, we've got records on our, our lease should be fine. Well, they were assessed a
million dollars by DFNA because they said, well, that's fine, you were paying your lease tax, but now you owe us for sales tax for when you originally bought the aircraft. So that is not only caused great expense to my client to have to challenge this at the tax appeals court or commission and now the FNA has appealed it to circuit court to get a judge to rule on it. My client has had the lawyer up and go to circuit court apparently to To to get a judge to say the legislature didn't intend for this to happen, so it's just it's an added burden and an
added expense to my client, but I can tell you it's caused panic among the aviation industry here in Arkansas because there are Probably countless uh companies and individuals who have set their aircraft up on this lease option. And are now worried that they're going to be next on the audit list. So, uh, this bill is being brought to you because this is a decision the legislature should make. This is a policy decision that is the prerogative of the
legislature, and I know all of, all of you personally and you know, I'm, I'm a strong advocate of the legislature, not ceding prerogatives to anyone else, so, uh, this bill as Representative Eve says, we'll clarify the definition of who is an aircraft dealer. Uh, because one of the things that I think has come out of this tax appeals commission case is we're kind of mixing the two or the agency is mixing the two. They're trying to treat my client who is a owner operator of the aircraft and has been for
a number of years as if they were a dealer. So dealers have an option of holding an aircraft in inventory for resale, which the first part of this bill clarifies who a dealer is. They have to sell that aircraft within 2 years or pay sales tax. That's fine. We're not changing that. We're just clarifying who a dealer is. The second part of this bill clarifies that if you are an owner operator who is leasing to a third party that that you can
pay your tax on the lease income, but it also sets a standard of 7.5% and that's not a number we just invented. Many other states have that in statute, uh, for instance, if you pay a million dollars to buy the airplane every year, you have to charge at least 7.5% or $75,000 in lease and then pay your tax to DFNA on that. So, um, again, this bill does nothing other than uh clarifies what the existing law is, what the policy has always been until this this
case came up. in the last year or so and uh uh also prevents what I think DFNA is worried about is people cheating, you know, setting up a lease that's $1 a year. Well, you can't do that. You couldn't do that anyway. This will prevent and and and show everyone where the line is so that there's absolutely no ambiguity. So, uh, with that, I'm probably too much information representative, but uh I think
Representative Les D. Eaves
Unverified
1:12:07
it's important to know that the fiscal impact you see in front of you only exists the
way you see it now if DFNA.
Um, is allowed to collect the tax. That the Tax Appeals commission said they
should not. So be happy to take any questions. OK, so, something you said got
my little brain working. I know and sometimes my brain working is a little scary. So when you said that a dealer holds it in the inventory for 2 years, and if it's not sold, they pay sales tax, correct?
Now my question is, if they pay the sales tax, then they turn around and sell it to a consumer. Does the consumer pay sales tax again? Paul, Yes, yes. So you're getting sales tax on something that's never sold and getting sales tax on it again when it's sold. And we wonder why general aviation in the state of Arkansas is in the shape it's in.
Representative Les D. Eaves
Unverified
1:13:18
Would you not agree? Yeah, yeah, yes, so it's also something I think we kind of gloss over at
times because we're a big agricultural state, but Arkansas's largest export is aviation and aviation-related parts and components. That's a huge deal in our state. And when, when we're doing things like this, I think it hurts. that part of our state again, that is the largest export that we have. Airplanes are easy to move around as you, as you know, so if we have any sort of tax policies, um, or, or any other
kind of policies that are not conducive to aviation, the airplanes will move out of state.
Which is not what we want. Yes, and on that. We do have people looking at that opportunity to move out of state if we don't correct this because they are getting double taxed and then the other problem we have is when they go out of state. What happens to the revenue that funds our general aviation airports. It dries up. So what happens and also we have
Representative Les D. Eaves
Unverified
1:14:24
Some pretty well respected um facilities in Arkansas, um, Representative Maddox has a, uh, an airport with a facility on on hand there that um rebuilds engines and does a lot of other things like that, and they're very well respected. I think we have some uh places up in North, um, West Arkansas that are very popular for um avionics upgrades, autopilots and things like that. I, I know people from Florida bring their airplanes up there to get work done, and that's just two examples. There's a lot of places, even in central Arkansas. Northeast Arkansas and all over
that have very well respected um aviation related, um, businesses, so I just think we got to be careful. Um, on how we treat this industry, but more than that, Um We, we need to be careful about how we're, we're taxing these things and I think in this case, um, we're trying to do it twice. And
just one question I'll open up to other members. Your bill is not gonna affect the double taxation of a plane that's been held more than 2 years. This
bill is not gonna fix the fact that a dealer will pay sales tax on inventory that they own because they've had it for 2 years and
then when they sell it, the end consumers again going to pay sales tax. This is not going to fix that. I think
Representative Les D. Eaves
Unverified
1:15:42
you experienced the same thing in your industry as well. And new cars and used cars and the same way that we don't
want to do that. Yes, just, just for the record, we, we don't want that bill, but Representative
Warren, you're recognized. Did you have a question?
Representative Jim Wooten
Unverified
1:16:01
you're recognized. Thank you, Madam Chairman. I your question follows my tack, but, um, correct
me if I'm wrong, but or clarify for me the difference between this and what representative Jet presented a 2 or 3 sessions ago, you know, are you familiar with that?
Speaker 209
1:16:17
Uh, Representative Wooten, I don't have the brain power you have apparently. I don't
Representative Les D. Eaves
Unverified
1:16:22
remember that bill, but I believe Mr.
Speaker 194
1:16:28
Wills does. Representative Woo and I believe you're referring to what's called the flyaway rule. which is if an aircraft dealer in Arkansas sells an aircraft to someone who is basing that aircraft out of state because that's where they live, you know, Texas or whoever that they are not responsible for collecting and remitting Arkansas sales tax on that transaction. So that
Representative Jim Wooten
Unverified
1:16:48
was Representative Jett's bill. OK, thank you,
follow up, um. So Who made the decision to for the double taxation.
Generally DFNA. Thank you. Thank you, members. Uh, any other questions? Say none.
I don't have anybody signed up to speak for or against except Mr. Willison, he's at the table. Do you have any questions for anybody else before I go to for and against. See you then No one else to speak for or against Representative
Eames, would you like to close for your bill? Yes, ma'am, I have a
Representative Les D. Eaves
Unverified
1:17:32
question of the committee, um, based on what I just said that the only reason we have a fiscal impact that shows this amount and, and quite frankly this amount. Mostly is from one client that that is going through the process of an appeal. So again, the only reason we see a fiscal impact statement of of this million dollars is because DFNA is trying to collect a tax that the Tax Appeals Commission says they shouldn't. That's why, and they're appealing it and that's certainly their right. But my contention would be that That the fiscal impact is not
correct and it should be zero. And for those reasons I'd like to uh ask the committee to Let this be one of the bills we can vote out today. I'll
make a motion to pass. Members, I have a
any discussion, I have a motion to pass any discussion on the motion. Seeing any, no discussion. All in favor of the motion to
Representative Les D. Eaves
Unverified
1:18:29
pass. Oh, Representatives make a motion as pass as amended sorry.
We're good. That that's what no discussion, you're good with the
motion to pass as amended. We have a motion do pass is amended all in favor say aye. Poll, say nay. Congratulations, your bill has passed and with that we're gonna
go down to SB 503 representative Eden. If you will go down to the end of the table and recognize yourself.
Speaker 217
1:19:19
Thank you, Madam Chair. District 26 if you introduce
Speaker 151
1:19:24
yourself, Paul for the record. Yes, ma'am. Paul Gehring, DFA. Thank you. I
Representative James Eaton
Unverified
1:19:29
think the bill is pretty simple and
Speaker 219
1:19:31
straightforward, um, you want, do you want to or do you want me to? I'd be
Speaker 141
1:19:37
happy to. So essentially what if you are an employer in the state of Arkansas, you, um, file an annual reconciliation every year that shows your, what you have withheld from your employees, um, in terms of their Arkansas
income tax withholding. We have a current threshold in Arkansas that if you have 125 employees that are going to be on your annual reconciliation that you are required to. file that annual reconciliation electronically. That was reduced in the last session from 250 down to 125. This bill would require that the threshold be reduced down to 75 employees in Arkansas. Now we do have a provision that already exists in Arkansas law that provides that if this is going to create an undue hardship on the business,
you can contact DFA and and request a waiver. The reason that we prefer electronic withholding of, of reports of their withholding statements. is that if we get that electronic report of the employer's withholding in at the end of January and that taxpayer files um the individual taxpayer that was the employee files their return in February. We can very quickly match up that information that was provided by the employer, uh, and then the return information provided by
the employee, if it's a paper process that the employer is sending in Paper W-2s. We have to key in those W-2. into the system. We did an analysis. There's about a little over 200 employers that are filing on paper that would need to send in their um Withholding electronically, but that would with this change, we're going to save us approximately 24,000 actual W-2s that we would have to key in um with our our employees, so we're just trying to make government
more efficient and speed up the process to have refunds issued to taxpayers. Happy to answer any questions.
Members that any questions? Seeing none, I don't have anybody signed up to speak for against the bill. I think anybody in the audience would like to speak for or against, seen unrepresentative Eaton. Would you like to close for your bill? Thank you, Madam Chair, members.
Representative James Eaton
Unverified
1:21:45
I, I think when he came to me with this, I, I
didn't see any issues with it. I know as an employer, I already do that and I have a very small group, so I
think it's a, I think it's a tax saver. And I'd appreciate, and I would actually uh move that we
do pass on this. Thank you. I have a motion to pass any discussion on the motion, seeing none, all in favor say aye. I say nay. Congratulations,
your bill has passed. With that, we're going to go move down to HB 1809, Representative Warren, you're recognized. And members, this
is one that we should be able to take a vote
on. It has no physical impact. move it. Representative Warren, if you'll introduce
Representative Les Warren
Unverified
1:22:42
yourself for the record and you'll be recognized. Thank you, Madam Chairman. Less warned, uh, representative District 84. This wheel is being presented at the request of the tax collectors throughout the state. There's been an issue for
disabled veterans with respect to the homestead exemption on their primary residences. For a multitude of reasons, the disabled veterans, primary residence is held in irrevocable trust, irrevocable trust, or an LLC. As long as the trust or LLC names the disabled veteran as the beneficiary or sole member, the disabled veteran will be able to claim the homestead exemption for their primary residence when it's held like that.
I'll be glad to entertain any questions. Members, do I see any questions? Seeing none, um, I don't have anybody signed up to speak for against the bill. Is there anybody would like to speak for against the bill. See no Representative Warren,
Representative Les Warren
Unverified
1:23:43
would you like to close for your bill? I am closed for the
bill, and I make a motion do pass. Members, I have a motion to pass any discussion on the motion, seeing none, all in favor say aye. Paul say nay, congratulations, your bill has passed. With that members, we're
gonna move down to HB 1685 Representative Underwood, if you'll go to the in the table and introduce yourself and you'll be recognized. Members, we will be taking a vote on this bill today.
Representative Kendon Underwood
Unverified
1:24:15
Thank you, Madam Chair. I'm Ken Underwood, State Representative District 16. Well, the committee, thank you for your time today. This is the grocery tax relief Act that eliminates the state grocer tax
in Arkansas, um, as many of you know, Arkansans have suffered in recent years with historic inflation and rising costs, especially when it comes to food and food ingredients and the Biden era inf inflation hardworking Arkansans the most at the grocery store. Fortunately, Arkansas ranks number one with a low cost of living. However, I read a study recently that showed Arkansas ranked 3rd in the percentage of income spent on groceries, and this bill aims to provide a little more relief to all of our constituents, and this is an effort by the Governor Governor Sanders' administration to
continue cutting overburdensome taxes. So in short, I want to give a quick summary of what the bill does. It only eliminates the state level sales and use tax on food and feeding food ingredients, but it maintains local government's ability to tax uh groceries on and food and food ingredients. Importantly, candy, soda, alcohol, tobacco, they're not included in the exemption, so they're still subject to taxation. And it doesn't apply to prepared foods or dining out. Um, so importantly to the prepared
foods exception that does not apply to foods that were simply cut, repackaged, or pasturized, so essentially meat produce and of course eggs uh would be exempt from the uh food and food ingredients uh taxation. Um, I do wanna note that I worked with uh municipal league and the counties, uh, they proposed some amendments to the bill. I accepted all of their amendments to the bill. The was also reviewed by the governor's office. They were good with all those changes as well, um.
And finally, I just want to kind of go over a few quick points on why we should do this. This is something that we can do uh to help fight inflation and food prices at the state level. Like I said earlier, it supports low-income families. This is a regressive tax that disproportionately affects low income families who spend a larger portion of their share of their share of income on food. And also makes Arkansas more competitive. Our neighboring states, Texas and Louisiana, uh, have both eliminated the state level grocery tax. And again, like I mentioned, it
maintains local control so that way local governments can still utilize this tax for their purposes. And finally, it has strong public support. Uh, by eliminating this tax, 67% of Arkansans support this tax uh elimination. 74% of Republicans, 72% of independents, and 53% of Democrats. And with that, I'm happy to take any questions. Members didn't see any questions? See none. I actually have no one
to speak for against this bill signed up. Is anyone like to speak for or
against the bill? Seen and Representative Underwood, you were recognized to close
Representative Kendon Underwood
Unverified
1:27:13
for your bill. Committee, I just will say in closing, thank you for your time. Thank you for hearing my my pitch
on this bill, and I'd appreciate a good vote. Thank you,
members, Representative Lundstrom, do pass, got a motion do pass any discussion on the motion. Seena and all in favor say aye. Polls say nay. Congratulations, Representative, your bill has passed. Thank you, Madam Chair. Thank you.
With that, members, we're gonna go down to the last bill for the day and it's HB 1636 Representative Ray, if you will
All right, committee, uh, State Representative David Ray, House
District 69. This is uh House Bill 16 1636. This is the phase out. of Arkansas's soft drink excise tax. I'm gonna take several minutes to explain this because there's a lot of information that I think you need in order to fully understand this issue. I want to basically um explain three things about this. First is the background and how we got
to this point. Uh, second is what the bill would actually do. And third, are the reasons that I think that you should support this bill today. So Let me start with the background. How in the world did we get ourselves in this mess. In 1992, the soda tax, as it's commonly called, or the soft drink excise tax was created in a special session. At the behest of Governor Jim Guy Tucker, and it was created to deal with a one-time budget shortfall in the Medicaid department.
So even though we had a temporary problem in 1992, the tax has never gone away. So here we are 33 years later with this tax still in effect, it's sort of like President Reagan said there's nothing quite so permanent as a temporary government program. In 1994. A couple of years later, there was an unsuccessful referendum, which is why any changes to this law require a 2/3 vote. Otherwise, I'm confident that
the legislature would have repealed this a long time ago. So fast forward to 2017 that year, Governor Hutchinson proposed doing away with the income tax on military retirement income. But he didn't want to do that as just a straight tax cut. He wanted to include payors in that legislation. So that legislation instituted a tax on digital downloads. Digital download products and it
also excluded soda products, soft drinks and candy from the definition of grocery. So that means that starting in 2017. These products were are now double taxed. So number one, you pay the excise tax on the product, which is substantial. I'll get to that in a second. And second, you also pay the full freight on the sales tax, which by the way, our sales tax, if you combine the state and local rate is on average the 3rd highest sales tax in the
country, so that's substantial too. And if that's not bad enough. The excise tax is literally a tax on a tax because it's levied on the final cost of the product, which includes the sales tax. So of the 40 of the 45 approximately, you know, $45 million a year that the soda tax generates. Literally $2 million of that is just the excise tax being applied to the sales tax portion
of the cost, so it's a tax, it's really triple taxation if you think about it. So how much is the tax? The tax is levied on Cans and bottles, it's levied on the syrup that goes into fountain drinks and it's levied on powdered drinks. So The syrup tax is $26 a gallon, the tax on cans and bottles and powders is levied at 21, well, I'm, I'm gonna round to the nearest scent, 21 cents per gallon. A finished product.
That may not mean a lot to you, so I did some research to try and make that help this um number seem um more easy to understand, and I did that by researching what the excise tax rates are on beer. In other states. And here's what I found. Beer taxes are calculated per gallon just like our soda taxes are. If you look at the tax on cans and bottles, we tax soda in this state more than 22 other states tax beer.
just on the excise tax. And if you look at how much we tax syrup. If you compare that to the beer tax in other states. We tax the syrup that goes into fountain drinks more than 49 out of 50 states tax beer on their excise tax. So just to put that in perspective, if you go to Texas, you're gonna, if you go over to Texas, you're gonna pay 19 cents a gallon in excise tax on beer, but in Arkansas on a Diet Coke, you're gonna pay 21 cents a gallon on that tax.
So it just shows you How substantial the tax is when you put it in context. The money that's generated from the soft drink excise tax. does not go into general revenue. It is special revenue that goes into the Medicaid trust fund. It is one of 6 different um funding streams that go into the Medicaid trust fund. So here we are today. We're the only, we're the only state in America that has this tax.
That's sort of the background and history of how we got here. So what would this bill do? This bill is set up to gradually incrementally phase out the soda tax over time in the most responsible and reasonable way possible. If this bill passes, it would, it would initiate a minimum of a 5 year phase down of the the soft drink excise tax each year until it's fully phased out.
And I think that's important because the phase out is a strategy that we have seen work really well with a lot of other taxes during um the, the years in office, the years that Governor BB was in office, we used to phase out with the grocery tax. It's the exact same method that we used last session in this very committee to approve the phase out of the throwback rule that Representative Beatty brought us and so it's also the same way we've been lowering um our income tax responsibly over many
years, just one bite at a time. So that's the approach that I'm taking here. But that's not all. Um, perhaps most importantly this legislation contains revenue triggers to ensure that the money that's going away from the elimination of the excise tax is fully replaced by the sales tax revenue on soft drinks. This will be um certified and attested to in an annual report that DFNA will produce after the end of each fiscal year and that's done to ensure that there
are ample funds available to replace the revenue that's going away and to ensure that um the folks that, that pay this tax are are indeed paying their fair share, but that they're not being overly penalized. So when one of the triggers, uh, when, when one of the revenue triggers is met on the sales tax, then the excise tax will be reduced, um, as is laid out in the bill. No more than one reduction can take place in each fiscal year,
so there's no way under this under this proposed law that the tax could be phased out any sooner than 5 years. It could potentially take longer if the revenue triggers are not met, it could take 6 years, it could take 7 years. Um, but it couldn't be any fewer than 5 years. So let me run through some of the reasons that I think this is good policy. Number one, this tax is, this is an economically damaging tax. The beverage industry in Arkansas directly employs over 1600 people, including hundreds
of people in the soft drink and distribution jobs. In fact, 6 months ago, um, the industry made a $25 million investment in West Memphis, hiring more workers and expanding their footprint there. The number of employees that are affected indirectly by this tax is enormous. Hospitality, for example, is our 2nd largest industry in the state behind only agriculture. Phasing out the tax would also help our restaurants, our convenience stores, our grocery stores, vending machine operators.
As well as consumers who enjoy these products. Um The, the next thing I want to mention is that the soda tax is extremely regressive. There's a report conducted not too long ago by the Tax Foundation that points out that 3/4, so 75% of all the revenues from the tax on a finished product are paid by households that make less than $100,000 a year. So it's just a fact that poorer families end up paying a larger
proportion of their income toward this tax than those who are on the on the higher end of the income scale. And much of the remaining burden falls on our small businesses, on our, our restaurants, our hotels, our convenience stores, etc. By the way, those are the people that during the pandemic, the government forced them to cease operating their business or basically upend the way they were doing business, so the ones that were fortunate to survive, uh, they get rewarded with um having to pay the rest of this tax.
Uh, and in fact the regressivity over soda tax is one reason that even a lot of progressive political leaders like Bernie Sanders, I would add, have even have actually opposed soda taxes around the country. The third thing I want to mention, and this is really interesting, there's a lot of downstream effects to the soda tax that people don't even think about. This tax is so poorly constructed that it captures way more than just soda at any time this is a problem, anytime you
get too cute by half with the, with the tax code. You run into really complex definitional issues and unequal treatment of specific products. So it's not just full calorie soda that's subject to the sales tax. Obviously it it includes diet soda as well. And if you look at the market, 60% of the products of of the soft drink products in America today are zero calorie. But it includes a lot more than that, green tea, for example. If you buy a bottle of green tea from a convenience store, that's subject, we don't think of that
as soda. It also encompasses uh canned coffee, uh, or bottled coffee, so a frappuccino or a double shot latte. It even encompasses fruit juice if it's not just the right amount percentage of fruit juice. Um, carbonated water. We don't really think of that as that as soda, but your Waterloo, LaCroix, Topo Chico, all of those products are subject to the sales tax. When you go to the gym to
exercise and you're replenishing what you've sweated out with Gatorade or Powerade, that's subject to the sales tax, or sorry, the uh to the excise tax, so, um, workout drinks are included, vitamin water, even drinks, even drinks like Propel, which is basically just water with electrolytes added. These are all subject to the soft drink tax, so it, it encompasses a lot more things than we think of, um, when you just hear somebody say, oh, the soda tax. And you know, maybe not everybody
cares about that, but the people that work in this industry that derive their living from these products, it affects them, and we're policymakers and we should care about what this tax encompasses as well. Um Arkansas, the next point I want to make is an important one. Arkansas is the only state in the country. That levies an excise tax on soda. We were not the only state in the country in 1992 when we levied this tax, but other states have realized this is a
really dumb tax to levy, and so since 1992 when we enacted this tax, Ohio, Louisiana, Mississippi, North Carolina, South Carolina, Louisiana, Maine, Washington, and West Virginia have all repealed their tax. So, when we talk about places in which our tax code is an extreme outlier. I can't think of a place where we are more of an outlier than on this policy. We're literally the only state in the country that has this
tax. West Virginia faced theirs out last year. The next point I want to make is that voters do not want these taxes, and you, you know, this, this topic was subject to a referendum in 1992 that was unsuccessful. And so because of that referendum 33 years ago, there are gonna be people that tell you that somehow this is the will of the voters that we have this tax today. And I disagree with that strongly for a variety of reasons. First of all, 33 years ago, our state was
extremely politically different than it is today. And also the context of that referendum is important at the time of the referendum, fresh on the voters' minds was the fact that the state had a funding shortfall due to the program being mismanaged at the time. We are not in any sort of similar situation today, um, our state is our the fiscal situation of our state is more robust than it has ever been in the history of our state. We have continued to run surpluses year after year
after year, and our state's long-term reserve. s have billions upon billions of dollars in them. Um, In other states where this topic has been subjected to a referendum more recently. Voters in Maine and Washington state, two states that are much less conservative than Arkansas, repealed their taxes by a vote of 65% and 63% respectively. And in fact in 2009 when Obamacare was being debated at the federal level. There was a push to
institute a national soda tax as part of a pay for for Obamacare, but that idea was so unpopular. that even President Obama rejected it. So, um, the last thing I'll say about this, um, in terms of reasoning is the soda tax is the only funding source that goes into the Medicaid trust fund that doesn't receive any benefit. Um, you know, it, most people don't know this, but very few states actually have a Medicaid
trust fund. There's only 7 states that do, and in those states those trust funds are designed as accounts where Medicaid provider fees are collected in order to ensure that they're spent on the corresponding services. They're not supposed to be some sort of catch-all fund, um, for other things like soda tax. And so every other source that pays into the Medicaid trust fund has some sort of remuneration coming back upon them, and they get compensated and that's just not the case with the soda tax. So those are
um those are many of the reasons that I think this is uh sound policy. And um at this point I'll
take Questions from committee members. Thank you members. Uh, thank you Representative Ray. Um, I have a quick question. So on the Medicaid Trust Fund. That actually, we all
know we've got it's being drawn down currently. Does your bill address replacing that?
So the revenue, uh, that goes away from the excise tax is going to be replaced with uh soft drink sales tax revenue which will go into general revenue as. Um, the vast majority of funding for Medicaid comes out of general revenue and so I think it makes the most sense to put it there. Um, there have been efforts in the past to try and put that money back into the Medicaid trust fund representative tried to propose that, uh, but the
people, the same people, the exact same people who are against this bill were against that proposal as well, um, and so, you
know, OK, I just want to understand so. You're gonna
take away the soda tax, but you're gonna put tax on So more tax on soft drinks.
No, there's not gonna be an additional tax on soft drinks. The tax on soft drinks has only been the sale, I should specify the sales tax on soft drinks has only been levied since 2017.
And it is. It is being collected at a much more robust rate than was predicted or projected at the time that it was enacted in 2017 and so the purpose of these uh these reports from, from DFNA that will be required in this bill is to ensure that the amount of money that's being that that is replacing the, the excise tax on the sales tax side.
exceeds, it actually exceeds the amount um that's being eliminated on the
excise tax side. OK, so we're taking the tax that we already collect on Sodas, whatever that
soda might be, which sales tax we're taking that sales tax and we're earmarking it
specifically for Medicaid. It's not being earmarked specifically for
Medicaid, but As everyone knows it's going in just to GR. It will go
into GR, yes, like it currently does now
And it can be used for anything, it just can't just be used for Medicaid. It can be used for anything. It could be used for the Learns Act. It could be
used for another tax cut. There's nothing that says we're going to replace the revenue that's what I'm trying to figure out. There's nothing that says we're gonna replace the
revenue that were taken away from here to keep the trust fund solid. That's the only thing I'm trying
to figure out. To answer your question very directly, the, the excise uh the uh the sales tax on soft drinks is not going to be diverted from
general revenue into the trust fund. It's going to it's going to stay in general revenue, but it the the excise tax will only go away if DFNA certifies that the sales tax revenue is coming in an amount that exceeds.
The the excise tax that's being phased out. That's what the triggers provide
for. OK, thank you. Representative Lynch are recognized. Representative Ray,
Representative Roger D. Lynch
Unverified
1:46:59
The small part of our population that benefits from the excise tax. I'm getting a lot of text and emails from those people. Uh, they fear that with the reduction of the moneys going into the Medicare trust fund that the money they have to serve the the part of the population that's most vulnerable and requires the most public service. is going to be affected by this reduction. I did a little math, the 21 cents a gallon that you're talking about on the tax.
That's like 5 or 6 sodas. We're talking about 4 cents a drink. And uh can you guarantee me that the price of that drink is going to
go down 4 or 5 cents. So, let me, you said several things there. Let me try to address
them, um, each individually. So The
first thing was, I think what you were asking basically is, are people in essence, are people gonna be harmed by this
tax going away. There are people that are fearful of that. There is no one who can demonstrate that anyone will be harmed by this tax going away and I would point out that the reason that I have Structured this bill in the way it is structured to have a, a gradual incremental responsible phase out that is contingent on revenue triggers. It specifically to lessen any impact that might exist. So all
of that was taken into account as we put this bill together. Um I would add to that that. There are 50 states in America, all 50 of them have Medicaid. And all 50 of them fund their Medicaid programs and 49 of them do it without an excise tax on soda. There is nothing at all that is uniquely debilitating about the state of Arkansas that we cannot administer our Medicaid program without this
special tax that no other state has. Um, Medicaid. As it is funded in general revenue is Category A. It is funded at the highest priority. As it deservedly should be. And It is funded in Category A just like we would fund public education just like we would find state police, so the idea that what I would say to those people who are concerned about that, the idea that we would.
Just not fund Medicaid. It is about as ridiculous as saying we would not fund state police or we would not fund the schools. So That, that would be my reassurance to
Representative Jim Wooten
Unverified
1:49:57
them. Representative Wootener recognized. Thank you, Madam Chairman. Uh, Representative Ray, can you guarantee that $45 million
is going to be diverted. From sales tax, general revenue
into the trust fund. Will you guarantee that to
this committee today? No, sir, that the answer that I gave to um Representative Kavanaugh's original question, uh, covers that, the, the, the sales tax on soda is gonna go into general revenue. It already is going into general revenue. What this bill, what the revenue triggers in this bill seek to ensure is that the amount of the sales tax that's coming in.
Uh, exceeds the amount of the
Representative Jim Wooten
Unverified
1:50:48
excise tax that's being phased out over time. But you will not give this committee a guarantee that that
the 45 million will be replaced, which helps disabled people and other as Representative
Lynch pointed out, I will guarantee this committee that the excise tax on soft drinks will not go away until it is demonstrably
proven that the sales tax revenue exceeds the amount. of the excise tax
Representative Jim Wooten
Unverified
1:51:16
revenue. So You won't guarantee that the
45 million, I'm, I'm want to stress that because my position has always been, and let me, let me give a little background. In the early 60s, which most of you can't remember. I doubt if there's anyone in here that can. I appeared before this committee in the Marion Hotel as a student
from UCA. In favor of the soft drink tax because higher education was in dire needs of that money. It failed 30 years later, when the state got into financial distress, we passed it. And So my, my point being that I've always been in favor of doing
away with it if it was guaranteed that it would be replaced and what we're hearing now is that it will not be replaced, and my question is, Why did you not put the 45 million, and I know about the trust fund and I know about money in there, but 10 years is $450 million. So we need to talk about the 450 million is an impacts the trust fund.
And I know you've got Billy and stuff, but you cannot guarantee us or the citizens or my constituents who are being affected, who, who stand the possibility of being affected. Is
that correct? No, I did give you
a guarantee that the soft drink excise tax, or sorry, the, the soft drink sales tax will by the time the excise tax is phased out, it will exceed the amount. Now, the reason you asked the reason why I didn't put it into
The trust fund. Um, I tried to explain that in my explanation of the bill, but I'll, I'll try to make it um clearer in case I was confusing on that point. The reason is because by and large, Medicaid is funded out of general revenue and it's category A and so it makes sense to put the funding into general revenue. The Medicaid Trust fund as I mentioned, trust funds for Medicaid are very rare among states. We did not have a
Medicaid trust fund in the state prior to 1993. There are only 7 states that have a Medicaid trust fund, and most of those trust funds exist to ensure that provider fees go back to the purpose that they're supposed to be used for so that they're not commingled with general revenue. That's just simply not the nature of the soft drink excise tax, so there's there's sound policy justification for why it's being done that way.
Representative Jim Wooten
Unverified
1:54:19
Thank you, Madam Chairman. Thank you, whoever's in
Chair
Unverified
1:54:22
right. Thank you. Thank you, Representative Lundstrom,
Representative Robin Lundstrum
Unverified
1:54:26
you're recognized. I, I think Representative Ray has answered this question, but um. Who, who was in charge with Who's in charge of making sure that this gets done in general revenue. That would be us, wouldn't
it? Absolutely it's the responsibility of this body to fund the core functions of government and that includes Medicaid. Thank you.
Any other questions, members? Where some eating or recognized. Thank
Representative James Eaton
Unverified
1:54:54
you, Madam Chair. So Representative Ray. I've been told, as I understand the Medicaid trust fund. That's paid to hospitals. Is that the only place that that money is spent? I believe in
the last session and someone could feel free to correct me if they think I'm misspeaking on this point. It is my understanding that in the last session, Senator Hickey
passed some legislation that required detailing of how those funds are spent and yes, they
are, they are, uh, expanded with hospitals is my understanding. And that was my understanding that
Representative James Eaton
Unverified
1:55:30
was this Medicaid trust fund, so it can't cut everything because it's only spent toward hospitals. Is that correct? No, just the, just the soft
drink part, not the, not the trust fund
as a whole, but the the soft drink portion, yes, yes, and that is what I mean. The,
Representative James Eaton
Unverified
1:55:51
the portion that it comes from the soda
tax is put into the trust fund. That is the money that is paid toward hospitals only,
correct? Thank you, Madam Chair. No, my understanding is that the trust fund is set up, Medicaid then can draw out the trust fund and pay any provider Medicaid funds. So it's not just the hospitals, it's to anybody that gets paid through Medicaid.
That in I, if I'm not speaking correctly, somebody let me know,
but that's my understanding. Thank you. Any other questions from the members? Seeing none, uh, we do have several signed that speak for and against, um, the first one that we have signed up to speak against the bill is Boyle. If you'll come down to the end of the table and introduce
Speaker 250
1:56:53
yourself and who you represent and you'll be recognized. Thank you, Madam Chair. I'm Beau Ryle with Arkansas Hospital Association. Appreciate the opportunity to be here. Uh, also, I represent as chairman of this loosely affiliated group called the Healthcare Providers Forum, and we gather and uh talk about legislation, but we rarely agree on anything, but one thing we do agree on is to retain the soda pop tax. So, uh, I think you've all received a copy of a letter where we've had some signers on
there, but let me just read a list of the list of the groups that oppose House Bill 1636. The Arkansas Association of Area Agencies on Aging, Arkansas chapter, American Academy of Pediatric. districts, Arkansas Healthcare Association, Arkansas Hospital Association, Arkansas Medical Society, Arkansas State Dental Association Community Health Centers of Arkansas and the Home Care Association of Arkansas. So obviously we're all in opposition to this bill as it
reduces uh the the revenue that goes into the Medicaid Trust Fund, which funds Medicaid, uh, you've heard a great history from Representative Ray on that. I won't bore you with that, but I will say this it was passed on a referendum of the vote of the people to retain this tax. 55% vote, 366,897 Arkansans voted for this, and that's why it requires a 2/3 vote of the House and the Senate to uh take this uh tax. way. So as discussed, um, there are no guarantees that money will
refill this fund, so we're concerned about how it impacts Medicaid today and in the future. The fiscal impact that's online. The second one, certainly caught our attention as you all know that it's a state federal partnership between Medicaid, so 30 approximately 31% state share, 69% federal share, so a $10 million reduction would lose 22 million federal share, a total of 33 million for year one cut, and you can go down through there total of 59, 86 million,
112 million year 5 would be 139 million impact. Over 5 years, 430 million. So we're certainly concerned about that moving forward. As I said, there's no guarantees that that will be backfilled in some way, and there is no right time to do away with this tax, reduce or phase out the soft drink tax, but I think it is important to note that Congress is considering billions of dollars in Medicaid reductions, uh, now seems like a not a good time to reduce the safety net or take it away for our own Medicaid program. Thank you very much.
Members, do we have any questions? See you then. Thank you for your testimony. Um, we have some
signed up to speak for it, Nick Mari. I
couldn't read your last name, sorry. Um, if you want to introduce yourself for the record, you'll be
Speaker 255
1:59:49
recognized. Nick Mackris with MK Distributors out of Pine Bluff, um, a lot of great discussion here and I was asked to talk about the impact that it has on a distributor, um, we are a
small distributor, um, non-alcohol distributor out of Pine Bluff. We're also a, a beer distributor, um, being in the beer business we're used to excise tax and um uh the soft drink tax is one that doesn't make as much sense and I wanna. talk about it from a distributor standpoint, a retailer standpoint, and then the end consumer. From a distributor standpoint, we are expected to absorb that cost without passing it along,
um, to the, um, in consumer, um, at a lot of these large chains that we do business with ultimately we can pass that along to the independent retailer who is then at a disadvantage, um, compared to your, your larger retailers, ultimately the end consumer is being. largeed More for um for the soft drinks, uh, that include assentative Ray, um, talked about.
More than just soft drinks, so, um, there, there are suppliers who Would reduce. The cost to the retailer, uh, ultimately reducing the price to the end consumer as well if this soft drink tax was to, to go away and I, I could guarantee that, um, I see what other states are charged and then Arkansas is um
Speaker 256
2:01:29
charged a a Arkansas retailers are charged a larger amount at times.
Thank you. Members, any questions? Saying that, oh, sorry, Representative Whittener recognized.
Representative Jim Wooten
Unverified
2:01:45
So Would you guarantee you you will not guarantee that all all distributors will reduce their price. Yeah, I mean, I, I can't do that, no. So, so we stand the risk that that
won't occur, it won't save consumers anything, but we'll still, the consumer will still be out of pocket, whatever the uh soldiers attacks
Speaker 258
2:02:10
is. Yes, I cannot guarantee what other distributors would do. I can guarantee you that our distributorship would there'd be no reason. To to charge that additional tax, so you got the guarantee from MK Distributors, but no one else. Thank you. Thank
you, Rep Chairman Wooton. Any other questions, members? Saying and thank you for your testimony. Thank you.
I do have a question for DFNA if they could go. To the end of the table. One just popped in my
Chair
Unverified
2:02:37
head and Representative Raid doesn't know either, so.
If you're gonna introduce yourself, please. Paul Gehring DFA. Thank you. Um, when we're talking about the soda tax, I mean, the tax on the soft drinks or whatever y'all classify as a soft drink. Um, the report that you would have to get that would do the trigger, how do you know when somebody's paying their sales tax that that's paid on one of these items. Madam Chair, so we would not ask
Speaker 141
2:03:12
our retailers to report to break those out on the the return, um, what we do have currently on the return are the food and food ingredients that are taxed at the reduced rate that is broken out, that is really a good starting point for our uh analysis that we performed to figure out how much is being collected on soft drinks as Representative Ray mentioned in his presentation of the bill back in In 2017, there was the
Act 141, which provided this, the most recent soft drink tax reduction that offset other revenue raisers and revenue um reductions. We did a study at that particular time using a lot of differentiated information from uh from the industry, uh, from, uh, statistical information to to provide an estimate, but at the um as this bill provides, it would be an estimate provided by from DFA or excise tax. section as well as our economists that work in DFA
would would work together to provide that information, but it would not be something that we would derive or or ask our retailers
Speaker 149
2:04:21
to specifically report to us on their sales of soft drinks. OK,
so we're really, you're gonna give an estimate, but we really don't know if it's. We're collecting that amount because you're going to use an estimate based on some
Speaker 136
2:04:35
factors you've got. It would be an estimate based upon available data that we have which would include the collections that we have
Speaker 141
2:04:41
right now on reduced food and food ingredients, uh, as
well as the industry information that we can obtain, but certainly it would not be an actual number from the retailers that we would, we would not be asking the re retailers to
Speaker 149
2:04:56
tell us what their sales are, because, because right now they're grouping those sales with all
of. other taxable. That's that's what I was, I was trying to figure out because they just group them together. ma'am. My other question is, we just. Voted to get out the grocery tax bill
to on the grocery taxes was that going to affect the factors
that you're gonna be looking at to
Speaker 136
2:05:20
try to estimate. No, ma'am, that, that we're still gonna have
Speaker 141
2:05:22
that that basis of data because we're going to continue to collect the local sales taxes, um, for food and food ingredients under that bill, uh, so we're, we're not going to have a state levied sales tax on food and food ingredients, but we will continue to collect that and have that broken out so that. From the local jurisdictions,
Speaker 149
2:05:39
the cities and the counties, they'll be protected. They won't have their taxes affected by the bill that was recently voted
out. OK, but if they choose to get rid of the sales tax, then you're one of your factors is gone. That's what I'm just trying to figure out, make sure that the data that we're getting for the estimate is
Speaker 150
2:05:59
good, so you feel comfortable that that is
Speaker 141
2:06:02
if, if we were, we would still have other sources of data in case the General Assembly in a future session decided to exempt food in and uh. Every soft drink, everything in its entire oh I'm sorry, food and food and ingredients in its entirety, we would continue to have other sources of information that would just be
one less um pool of data that we could draw upon. OK, I appreciate that. Sorry that I brought
you. Is anybody else got a question for DFNA? Thank you. That just popped in my head. Um, and with that I don't have anybody else to sign to speak up for the bill. I have several signed up to speak against the bill. I think Again it next. So, um, I'm trying to go down the list, uh, Janet Mann, you signed up to speak against the bill. If you go down to the end of the
Table, introduce yourself and who you represent.
Speaker 264
2:07:01
OK, then I'll get him now. Good morning. I'm Janet Mayhan, deputy secretary in the Medicaid director at Arkansas DHS. I'm here primarily to speak against the losing of earmarked funds in the trust fund, um, do not do tax work anymore, um, do more public health policy and wanted to speak on the purpose of the Medicaid Trust Fund and what it does represent to the Medicaid
um program annually, so. We are the safety net program. We serve approximately 880,000 Arkansans in the state every year, which is also made up of about 420,000 children, so we do um have. About 6 to 7 accounts in our Medicaid trust fund that are most of those are used on very restricted uses for different providers that do supply that the medi the Medicaid trust fund or the soda pop tax account is
the only account that we can use to um for any Medicaid expenses
Speaker 265
2:08:01
that is eligible for. We try very hard not to have to use it unless it's absolutely necessary, and so far this year, We have used it to the tune of $53 million which is above the annual deposit of around um anywhere from 38 to $42 million. That money is matched, so it does represent 30 cents approximately on the dollar to match to make 70 cents on the dollar to make a full $1 for the
Medicaid budget. So it is very important for our budget to maintain that that funding source. So, um, with that, uh, I will
close or. See if there are any questions. Uh yes, I have a question. So we're currently at the 70/30 match. It, it's
Speaker 265
2:08:45
around traditional in traditional we have approximately 71 and 29. They, they like to use a lot of percentage points, so we do round to 70, 30. It does change every October 1, um, it's
determined by a per capita um formula at the federal level. We usually try to, we usually find out about 3 to 6 months in advance of what the future um FMAP rate will be. Do you have um a higher match rate for our expansion population is at 9010. OK. The reason
I asked that question is we actually our FMAP went up, which was a good thing for Arkansas, which meant that we're getting more prosperous and so,
uh, as the feds see us getting more prosperously make us pay more of our own Medicaid cost. So,
This is, so if they reduce our match. Say by 1%. What
does that mean that we have to pay in tax dollars. To make up for that. Does anybody really
Speaker 264
2:09:42
know? It varies from year to year. So every percentage point changes and so we've looked at different calculations, um,
Speaker 265
2:09:48
I'm trying to go off of memory, but a full percentage point. I believe Somewhere in the 45 to $60 million dollar range, I would need to verify that from old calculations.
So on the low end it would be 45 on
Speaker 265
2:10:07
the high end would be 64 1% change. I believe so. We, we looked at it last summer, um, I'm looking at DFNA and I can't remember what we talked about because we were looking at budget and how that would impact because we knew the change was coming in in
October for our budget and how much a change did they give us on our last FMAP? How
Speaker 265
2:10:27
much reduction? did they? It was not quite a full point. It went from 72% on September 30th to 71.14 on
October 1, OK. And If, and I'm just talking hypothetical, so we don't really know what the federal level's gonna do because we don't, with all the cost savings and things that they're looking because quite frank, we have to do it at the federal level, deficits too high. We've got, they've got to figure out something. But as a state budget we have to figure ours out too based on what we think that they might do if Heaven forbid they were to come in and say we're gonna take your
match down from the 70/30 we've got right now to say 60 or 50-50. What
does that do to our Medicaid cost that we will then
Speaker 265
2:11:18
have to pay. It would increase the state match tremendously as to pull down those federal
dollars to maintain the budget. And so if it's for if
it's 45 million and they go down 10% we're looking at $450 million that we would
Speaker 265
2:11:37
have to come up with, just to get the federal match. If the assumptions are correct and it costs $45 million for 1% point, yes, if you, if it were to be reduced 10% to maintain the current budget. Then we would
have to multiply it by 10. That is correct. And just one more question, I'll
let other people ask questions on your Financial impact. You put there that the change per year, um, the state share is 132. We lost the match of what, 298, so it
made a total loss of 430 that we would have to put back in because there's no real mechanism that replaces it. So, My question is if we then came to you and did have a mechanism and we replaced the, we, we would really be replacing would only be the 132 to keep the 298, correct? Where it says the state share. Yes, I'm sorry,
Speaker 264
2:12:32
I was looking at the details. Yes, the total number is the 132. That's over a
five-year period, so I think it would be if
we came up with 132 million in state budget we could still get the 280 fed it didn't matter where it came from, correct? OK. Alright, thank you. I'm gonna let other people have questions. uh, representative Ray had a question. Uh, Representative
Chair
Unverified
2:12:59
Way, you're recognized. Hm. All right. This man, um,
I appreciate your comments. So I guess my question is the agency that you work for is an executive branch agency. So I guess is you're speaking against the bill is your position, your position, or is it
Speaker 264
2:13:23
that of the governors? I'm against the er the loss of potential Medicaid trust
Speaker 265
2:13:27
fund. I do work for an executive agency. I am sitting here in my official position, but I'm not getting, I am not commenting on the debate of reducing a tax that is that
is being before this committee. I am here to speak against losing what is going to be deposited into my trust fund. Your trust
Speaker 264
2:13:49
fund. I mean, I'm representing the agency, it's the Medicaid Trust Fund, uh, you know, I, I do, I do take it very seriously if we're gonna lose. Annual funding, thank you. Any other questions, members? See you
then, thank you for your testimony. All right, I don't see anybody.
Speak for the bill, would you like? If
you'll come down to the end of the table and
Speaker 272
2:14:21
introduce yourself for the record and you're recognized. Thank you, Madam Chair, Dennis Farmer with the Arkansas Beverage Association and uh Representative Ray covered a lot of things great, uh, mostly wanted to sit down. Naturally we were foresee this um tax go away and we support this bill, but there were several questions that were brought up and I wanted to do what I could to uh
give you a little bit more background of where we came from, why we disagreed to have the full sales tax rate placed upon us and what the expectations were from there. We were very happy to Support the military retirement exemption bill back in 2017 when Governor Hutchinson came to us and asked about that. We said, OK, let's look and see, is there precedent, is there good policy that we can get behind to do this, and we checked in the 30 or so states that do not have any sales tax on food. There are
12 of them that did have sales tax on soft drinks, and we said, OK, we can go with that because it's better if you're gonna do something different to, uh, so you're getting something additional. Please put it on the retail side. It's better for business because it takes us out of the model is better for the consumer because it doesn't artificially inflate the price, uh, and it's a real quickly sidetrack from that Representative Wooton, you brought up about, can we guarantee these prices will go down, actually we can't because that's called price fixing, but
I can tell you that in the national chains like Walmart Doar General instead of dealing with 65 Coca-Cola dealers across the country. They have one pricing agreement. That everyone will sell Coca-Cola to them at the same price, and that pricing agreement there is an asterisk that says in Arkansas it's 50 cents a case more. When this tax reduces or goes away that Ari will change and it'll go his way as well. So knowing the big retailers will apply that
pressure. It could happen, but there's no way we can promise you that it would and note that we're talking about doing this 5 steps over who knows how many years. It's gonna be very incremental change, but policy wise it's hard to defend having this tax on the wholesale level, um. And when you looked at those other states that had a sales tax and several of them, it was done to stop an excise tax from happening, but especially like in the case of Mississippi, most recently, it was actually used
to reduce their tax. Every other state has had a much lower rate than Arkansas. So we knew it would take time to get to a point, but it was a gentleman's agreement with the governor, and that's why we continue to work with DFNA after the 17th session, and I would say one thing you can just look at over the weekend as you're thinking. about this bill and the aggressive nature of it. You pay the same 2 cents per 12 ounces regardless of the price of the product when you're talking about the excise tax, sales tax is much more fair because the
more you can afford to pay, the more taxes remitted to the state. So that was part of our whole deal is that you're looking at a flat revenue that gets smaller and smaller and smaller. I totally understand everything that DHS works with and that, yes, absolutely. The soft drink tax is the only portion of what goes into the Medicaid Trust Fund that has flexibility to it, um, and so it can be spent on anything, uh, and I have to admit every time we've talked
about a soft drink tax and it seems like the parable should have been feed. 5000 with one soft drink because it seems like our $40 million tends to fund everything once uh reducing this tax is brought up. Senator Bic Hickeys bill does require that a detail what comes out now and for this current fiscal year, you can go look at the report is issued to peer every month, uh, this last one was called Q7, Medicaid Q7, and
the only thing that soft drink revenues have gone to. this fiscal year has been for hospitals, not to say it wouldn't be in the future, not to say that it couldn't be used on other things, but it could. My very final point is in our 2017 bill, Senator, we tried to address the exact concerns you're bringing up about guaranteeing that the trust fund would be quote unquote held whole. And so we did send the 5.9 million of reduction in soft drink tax we sent general revenue dollars to the trust fund to replace that to keep it
whole and. And that was in place through 2021 since in 2021 when the RSA was crafted, it was decided that 21, the general revenue from the sales tax on soft drinks has been in general revenue and part of the RSA that funds Medicaid through that method, and I defy anyone to tell me something different that happened between
17 and 21 and 21 to today. There's been absolutely no complaints about it. I don't know of any program provider recipient that has lost any services because we made that change that we don't have to send it to the Medicaid Trust fund. in order for it to take care of Medicaid needs. With that, I'll take
any questions. Thank you. Um, how much did you say that got diverted from the Medicaid Trust fund in 17 from the
Speaker 273
2:19:44
soda tax 2 sorry, 21, sorry 5.9 million.
Speaker 272
2:19:49
How much? 5.9 million. If you look at the fiscal impact on the cuts that we'll be having if we do pass the thresholds, starts off at 9.6 for the first cut. The remaining cuts at 8.3, uh, that first cut would be percentage wise a little bit larger than the version that happened in 201. but by the time we get to those $8.3 million dollar reductions is going to be almost identical reduction or change because really we're not reducing what's happening with Medicaid. We're just very slowly moving some of
the funding from special revenue to general revenue, but the money's there, what our
Medicaid match was in 2021 with that reduction you can from we
Speaker 272
2:20:29
were at the enhanced FMAP at that point, correct? Should have been about 0.77 because that was during the pandemic so we actually had a higher
Money coming in from the feds when we did that reduction which would mean that
Speaker 272
2:20:43
if there was a negative impact to be felt by moving that 5.9 from the trust fund to general revenue, it
would have been exacerbated more because there was higher FM map to it. Actually, I think our FAP was lower in the Medicaid because the feds paid
Speaker 272
2:21:04
more during the pandemic. they pay more, which meant for every dollar that we spent we got more from the feds. Correct. I basically 1 to 4 instead of 3 to 7 at that point. Thank you. Thank you. Thank you.
Any other questions, members? Seeing none. Thank you for your
testimony. Um, the next signed up to speak against it
Speaker 276
2:21:34
is Anna Strong. Not. I guess she's not here. Signed up to speak
against the bill is Sheena Olson. Would you like to come down to the end of the table and recognize yourself?
Speaker 277
2:21:55
Sure, Sheena Olson, vice president of government relations for Arkansas Children's. Thank you. Um, I'll be brief and um we often say, you know, um. Director Mann testified earlier there's 420,000 children covered by Arkansas Medicaid, that is a huge proportion of who we see at Arkansas Children's, um, we're over 60% Arkansas Medicaid. We serve over 20,000 kids in the primary care clinics, so for us
and while we come here to the end of the table every time this comes up, we just wanna be sure that Arkansas Medicaid is strong and has this as a safety net and that. This is part of the resources for Arkansas Medicaid, and that's all I have. Members, we
have any questions? Seeing and thank you so much for your testimony. Members, I don't have anybody else signed up to speak for or against
the bill. Uh, is there anybody else in the
audience who would like to speak for or against
the bill. See none representative Ray, you're recognized to close for your
bill. Thank you, Madam Chairman. I will, uh, just briefly touch on some of the points that were raised, so the opponents of the bill, um, have tried to cast doubt on this in a number of ways. Number one, they've said, oh well, our match rate may
change, which is an interesting argument to make because, you know, people made this observation back when we were having debates about expanding Medicaid and the impact that that might have to the state, and they dismissed those concerns at that time, so. It's interesting that they're offering that as an objection now. Um, they argue that we have to replace the revenue. The interesting thing about that, first of all, the, the triggers in the bill ensure that the revenue is being replaced, but 4
years ago they want it replaced in the trust fund is what they say, but 4 years ago, Representative Lanny Pye sat in this very chair that I'm sitting in right now in the same room and presented a bill that did replace the revenue back into the trust fund just like they're claiming they want.
Speaker 227
2:24:14
And all the same people came to the end of the table and spoke against it
then. So, um, the next, the next thing is, you know, they keep bringing up the match, the match, you know, this is gonna affect the
match. This is not $45 million. This is 100 and however many million dollars. the this has nothing to do with the match. That is a complete red herring designed to confuse people. Money isn't matched when it goes into the Medicaid trust fund. It's matched after it's spent, um, and so where the money comes from is irrelevant to the match. When DHS spends money, um, subject to the Medicaid match, that's when it that's when it applies.
And the argument that this is going to hurt vulnerable people. They are, they are proffering that argument to tug at your heartstrings to try and confuse you, but this is what you need to remember. There are 50 states in America, all 50 states have Medicaid programs. All 50 states fund their Medicaid programs and 49 do it without this tax, they would have you believe that there's something uniquely debilitating about Arkansas that
we can't administer our Medicaid program without this tax that we're somehow. too dumb to figure it out. I reject that argument. You know Um, I'll say a couple of things in closing. This tax was initiated 33 years ago in response to a specific problem. The problem has gone away a long time ago. But the tax has persisted, so now we're at a point where we're
double taxing this product, I would argue we're triple taxing this product. As a result of changes that have been made since then. And we're now the only state in the country that continues to do this. So I put this bill forward to try and rectify that. To try and help our restaurants, our small businesses, our convenience stores, our grocery stores. People that are creating jobs in our communities.
With this bill we can incrementally. In a responsible way, just like we've phased out the grocery tax over time just like we've, we're in the process of phasing out the throwback rule over time, incrementally, gradually, we can do that. And um with that, I'm closed for the bill. As for a good vote. I make a motion to pass. Thank you members. We have a motion to pass any
discussion on the motion. Representative McCurry, you recognized.
Representative Rick McClure
Unverified
2:27:04
Well, I've had 4 years to think about this since the last time I've heard this. So it look, it appears to me that the objective is to make sure that the Medicaid trust fund is funded well. So that we all feel safe about funding critical services. to areas and I'm in complete agreement with that because it it's very, very close to home for me. But then when I look at the soda
tax, it doesn't look from year to year that the soda tax revenue is increasing with the rate of inflation, so they're not keeping up with inflation. One of the things I did not hear this time, there are so many different laws, regulations and rules about the mixing and canning and uh. territories of stuff, but you can't convince me that with this tax in place with all of our border activity that we're not losing revenue in several places.
We've got reports they're going to make sure that we're not going to go backwards. And
funding them. On the The Medicaid So if we've got reports that say that's gonna make sure that we don't go backwards. Then the only way we can go is forwards with growth of eco with the growth of the economy and funding category A. Now I don't have reports here. I, and I don't want to spend all weekend trying to figure all this out, but it would be worth the conversation.
To say as growth happens in Category A funding. That you could wind up with more funding going in and being available, then you are restricting it to just this tax. So I just want you to think about that, that mathematically we may be leaving money on the table if, if, if we don't do this. But the end result is, is making sure
that the programs are taken care of and I think, I think you've accomplished that. So thank you. Representative Wootten, you're
Representative Jim Wooten
Unverified
2:29:09
recognized. Thank you, Madam Chairman. Let me state my position again, my position has been since day one was the same position on the sales tax, the same position on the soft drink tax. If we guaranteed that that $45 million is going to be replaced immediately forthwith and we not kidding that guarantee. Let me also add this is 2025. There's a
lot of things. It's different today than were 4 years ago when we had when we had the opportunity to vote on this. And let me just point out in case you haven't heard the stock market is down 1500 points today. Today is now 1500 points along with about 2000 or 2500 that it's gone down in the past 3 weeks.
And let me uh uh a further state to you that there's no guarantee today that federal funds will continue in any amount to any state. And so far as 50 other states voting to do something. I don't care. This is Arkansas. We've got to look out for 880,000 people that are defending the dependent upon. The Medicaid fund.
The trust fund is a great benefit to those recipients. It guarantees that regardless as the points drop, if it goes down, we'll be able to fund it. You take $45 million out of it without a guarantee that that's going to be replaced, you come up to my district and you face the disabled people and you let them tell you what this could perhaps mean to them. And they don't care about
whether or not they go down at the store. I was in the convenience store business for 30 years, and I wanna tell you that I, that I, I guarantee you, you will not realize a consumer drop in the process. We've already lost $180 million that Washington has taken away from Arkansas. 180 million, half of that in the
Department of DHS. The other part of it is in public health. They are doing what they've got to do because we're gonna pay the price if they don't deal with it. $36 trillion in debt, $1 trillion a year for interest we can continue down that road. We make a lot of hellabaloo about the fact that Arkansas has a balanced budget. You guarantee we do because we had the sense.
To pass a constitutional amendment that says you have to have a balanced budget. The governor's office. They not only this governor, but others make a big to do about. We've got a balanced budget. They don't have any choice. They've got to balance the budget. And I don't appreciate the fact that that a representative of an agency came forward and said, hey, this is gonna hurt us.
Contrary to what the governor's office has said, and I'll tell you she can come up to my district anytime she wants to and tell my people. At 880,000 other people in this state that are dependent upon the fund. So again, in completion, in conclusion, let me stay that my position has been and Mr. Former can guarantee this. I've told him more than once. If the money is guaranteed, it's going to be
replaced in the trust fund. I have no problem with doing away with the tax. I took the same position when I was director of the department. The financed administration, is it related to the sales tax. And dropping and doing away with it. 2030 years later, we're still getting ready to deal with some portions of that bill, but This is a bad time to do what is
suggested to do with a guarantee that the money will be replaced.
Representative Roger D. Lynch
Unverified
2:34:03
Thank you, Madam Chairman. Representative Lynch are recognized, first off, I'd like to say that Representative Bray did an
excellent job presenting the bill. Um, you know, my, my opinion, I don't notice that tax. It's such a small amount that that me personally and my family, it doesn't affect us. I do think that it has a very significant impact on those people that are depending on that income stream
and so for that reason, I'm voting
against the bill. Thank you, Reverend Lynch. Any other discussion on the motion? Seeing none, we have a
motion to pass all in favor say aye. Those poll say nay. I'm gonna say that I have it. Thank you,
Representative Ray. Your bill has passed. With that member. We have no other business. We germ.
Agenda
CONCUR IN SENATE AMENDMENT
Number Sponsor Subtitle
HB1444 Pilkington TO AMEND THE SALES AND USE TAX EXEMPTION FOR DATA CENTERS.
REGULAR AGENDA
Number Sponsor Subtitle
HB1636 Ray TO AMEND THE ARKANSAS SOFT DRINK TAX ACT, AS AFFIRMED BY REFERRED ACT 1 OF 1994; AND TO PHASE OUT THE SOFT DRINK TAX BASED ON SALES TAX COLLECTIONS FROM SALES OF SOFT DRINKS.
HB1685 Underwood TO CREATE THE GROCERY TAX RELIEF ACT; TO AMEND THE LAW CONCERNING THE SALES AND USE TAXES LEVIED ON FOOD AND FOOD INGREDIENTS, AS AFFIRMED BY REFERRED ACT 19 OF 1958; AND TO EXEMPT GROCERIES FROM STATE SALES AND USE TAXES.
HB1698 Torres TO AMEND THE LAW CONCERNING THE INCOME TAX TREATMENT OF EMPLOYER CONTRIBUTIONS FOR AN EMPLOYEE'S MEMBERSHIP IN A HEALTHCARE SHARING MINISTRY OR OTHER MEDICAL COST-SHARING PROGRAM.
HB1699 McCullough TO ADD FIREARM SAFETY DEVICES AND FIREARM STORAGE DEVICES TO THE SALES TAX HOLIDAY; AND TO DECLARE AN EMERGENCY.
HB1702 Wooldridge TO AMEND THE SALES AND USE TAX EXEMPTIONS FOR CERTAIN MACHINERY AND EQUIPMENT USED IN MANUFACTURING; AND TO PROVIDE A SALES AND USE TAX EXEMPTION FOR MACHINERY AND EQUIPMENT USED IN CLOSED-LOOP RECYCLING.
HB1738 Crawford TO PROVIDE A SALES AND USE TAX EXEMPTION FOR DISABLED VETERANS.
HB1750 Cavenaugh TO REPEAL THE ARKANSAS CORPORATE FRANCHISE TAX ACT OF 1979; AND TO MAKE CONFORMING CHANGES.
HB1804 Ray TO AMEND THE LAW CONCERNING THE LEVY OF THE GROSS RECEIPTS TAX, AS AFFIRMED BY REFERRED ACT 19 OF 1958; TO PROVIDE A SALES TAX EXEMPTION FOR UTILITY VEGETATION LINE MANAGEMENT SERVICES.
HB1807 Eaves TO AMEND THE SALES TAX EXEMPTION FOR AIRCRAFT HELD FOR RESALE AND USED FOR RENTAL OR CHARTER; AND TO CLARIFY THE PERSONS ELIGIBLE FOR THE SALES TAX EXEMPTION FOR AIRCRAFT HELD FOR RESALE AND USED FOR RENTAL OR CHARTER.
HB1809 Warren TO ALLOW FOR PROPERTY OWNED BY A TRUST OR A LIMITED LIABILITY COMPANY TO QUALIFY AS A HOMESTEAD FOR PURPOSES OF THE PROPERTY TAX EXEMPTION FOR DISABLED VETERANS IN CERTAIN CIRCUMSTANCES.
HB1828 Breaux TO CREATE A SALES AND USE TAX EXEMPTION FOR INSPIRATION POINT CENTER FOR THE ARTS, INC.
HB1857 L. Johnson TO AMEND THE LAW CONCERNING THE COLLECTION OF SALES AND USE TAX ON THE SALE OF A NEW OR USED MOTORBOAT; AND TO PROVIDE FOR THE DIRECT PAYMENT OF SALES AND USE TAX ON A MOTORBOAT SOLD BY A MOTORBOAT DEALER.
HB1862 J. Mayberry TO AMEND THE INCOME TAX CREDIT AND THE INCOME TAX DEDUCTION RELATED TO MAINTAINING, SUPPORTING, AND CARING FOR AN INDIVIDUAL WITH A DISABILITY.
HB1881 Ennett TO ADD MENSTRUAL DISCHARGE COLLECTION DEVICES TO THE LIST OF ITEMS EXEMPT FROM SALES AND USE TAX DURING THE SALES TAX HOLIDAY.
SB422 C. Tucker TO ALLOW NONPROFIT ORGANIZATIONS TO CONTRIBUTE TO A NEW OR EXISTING ARKANSAS BRIGHTER FUTURE FUND PLAN ACCOUNT; AND TO REQUIRE THE TREASURER OF STATE TO FACILITATE CONTRIBUTIONS BY A NONPROFIT ORGANIZATION.
HB1904 Lundstrum TO AMEND THE PENALTIES IMPOSED FOR FAILURE TO COMPLY WITH THE ARKANSAS TAX PROCEDURE ACT.
HB1910 Lundstrum TO ALLOW A DEDUCTION FOR CERTAIN QUALIFIED BUSINESS EXPENSES UNDER THE INCOME TAX ACT OF 1929.
HB1920 McClure TO TRANSFER GENERAL REVENUE TO THE AGING AND ADULT SERVICES FUND ACCOUNT TO BE USED FOR FOOD SERVICES BENEFITING THE ELDERLY; AND TO DECLARE AN EMERGENCY.
HB1922 Maddox TO AMEND THE CONSOLIDATED INCENTIVE ACT OF 2003; TO CREATE AN INCOME TAX CREDIT FOR RELOCATING CORPORATE HEADQUARTERS TO THIS STATE; AND TO ENCOURAGE CORPORATIONS TO RELOCATE TO ARKANSAS.
HB1932 McCollum TO AMEND LAWS CONCERNING THE CORPORATE FRANCHISE TAX; TO REPEAL THE ARKANSAS CORPORATE FRANCHISE TAX ACT OF 1979; AND TO REQUIRE AN ANNUAL REPORT FOR CORPORATIONS.
HB1935 Eaves TO CREATE A MODERNIZATION AND AUTOMATION TAX CREDIT TO ENCOURAGE INVESTMENT BY EXISTING BUSINESSES WITHIN THE STATE.
SB412 J. Boyd TO AUTHORIZE THE DEPARTMENT OF FINANCE AND ADMINISTRATION TO SET THE PER-MILE AMOUNT FOR THE INCOME TAX DEDUCTION FOR TRAVEL AND TRANSPORTATION EXPENSES BY PROCLAMATION.
SB503 Crowell TO REDUCE THE NUMBER OF EMPLOYEES AN EMPLOYER MUST HAVE TO BE MANDATED TO FILE AN ANNUAL INCOME TAX WITHHOLDING STATEMENT ELECTRONICALLY; AND TO REQUIRE THE ELECTRONIC FILING OF A WITHHOLDING RETURN FOR CERTAIN EMPLOYERS.
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — REVENUE & TAXATION- HOUSE, Apr 3, 2025 | Agenda | 5 | Official source ↗ |
Speakers
Representative Frances Cavenaugh Chair
Unverified
Representative Aaron Pilkington
Unverified
Representative Robin Lundstrum
Unverified
Senator Clarke Tucker
Unverified
Uh Dan
Unverified
Representative Cindy Crawford
Unverified
Speaker 40
Speaker 41
Speaker 45
Mark Diggs
Unverified
Representative Tippi McCullough
Unverified
Representative DeAnn Vaught
Unverified
Representative David Ray Chair
Unverified
Representative James Eaton
Unverified
Representative Les D. Eaves
Unverified
Representative Jim Wooten
Unverified
Speaker 95
Speaker 106
Speaker 109
Speaker 122
Speaker 125
Speaker 129
Representative Richard McGrew
Unverified
Speaker 137
Speaker 141
Speaker 136
Speaker 149
Speaker 157
Representative Roger D. Lynch
Unverified
Representative Randy Torres
Unverified
Chair
Unverified
Representative Rick McClure
Unverified
Speaker 193
Speaker 194
Speaker 209
Speaker 217
Speaker 151
Speaker 219
Representative Les Warren
Unverified
Representative Kendon Underwood
Unverified
Speaker 250
Speaker 255
Speaker 256
Speaker 258
Speaker 150
Speaker 264
Speaker 265
Speaker 272
Speaker 273
Speaker 276
Speaker 277
Speaker 227