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…”
|
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…”
|
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…”
|
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. |
|
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…”
|
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. |
|
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. |
|
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. |
|
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. |
|
HB1500
· 1 mention in agenda
Matched: “…TO CERTAIN ORGANIZATIONS THAT SUPPORT VETERANS' FACILITIES. HB1500 Beaty Jr. TO ENHANCE ECONOMIC COMPETITIVENESS BY REPEALING…”
|
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…”
|
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. |
|
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…”
|
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 |
|
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…”
|
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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So we're going to hear today,
we're going to hear and concur on the amendment on HB 1444. We have a Senate bill, SB 422. We have HB 1699, 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 going to 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 concur on your amendment thank you madam chair representative aaron
Representative Aaron Pilkington
Unverified
0:56
pilkington district 45 johnson and pope county I've just got to concur in a Senate amendment, and it just deleted some language that wasn't needed, and we're good to go.
Representative Robin Lundstrum
Unverified
1:08
No opposition to it. Thank you. Motion do
pass. Any questions? No questions. Do I have a
motion? Do pass as amended? I have a motion. Do pass as amended. Any discussion? Seeing none, what's
the members? Say aye. Aye. Opposed? Congratulations, your amendment is passed.
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,
Senator Clarke Tucker
Unverified
1:48
Madam Chair and members. Clark Tucker, Senator District 14. Members, and this is one
that we can take a vote on, just for the record. Thank you. Okay, Senator Tucker, you're recognized.
Senator Clarke Tucker
Unverified
2:12
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. You're welcome to. Members this is a bill that we can all feel good about voting for. 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 529 education accounts 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 confidential information and in a way that still empowers parents to have decisions over their kids future so with that i'm going to ask mr andrews to kind of tell his story please introduce
Uh Dan
Unverified
2:59
yourself for the record thank you my name is uh dan andrews and i'm here on behalf of the grow foundation you're recognized thank you so as senator tucker mentioned uh the grow foundation is established to set up 529 accounts for uh every student in a given population
and in our initial case that would be an elementary school in jacksonville arkansas We are going there and setting this up alongside an education program to teach them economics at a basic level and help them understand the value of growing assets and saving for college and things of that nature. What we found as we started this program is there's really not a great way for us to get their information and set it up into a 529 account that really protects their privacy
and information and so we approached Senator Tucker about 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 the school that we're working with was very enthusiastic about doing this but there are restrictions on the information that they can share with us and so what What this allows us to do is to go in there and rather than having to go and gather signatures
from every single parent in the school allowing this to happen, which we initially started to do, but unfortunately the studies show that that would leave probably the students that most need access to this program out of the loop on this. So this allows the school to directly work with the treasurer's office to establish these accounts and we can go about funding that for them from the charitable foundation and letting that
Senator Clarke Tucker
Unverified
4:52
grow for them. So Mr. Andrews came to me.
He's a constituent 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 what What this does, 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 in a way that's efficient. The foundation, even though they will be giving money to these kids 529 accounts, they'll
have access to none of their confidential information, like the social security number or date of birth or anything like that. 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 a 529 account up for your own child or grandchild or whoever. So all of the confidential information will be treated exactly the same. This just 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, you know, it's in the legislation that parents have an opportunity to opt out if they choose. So, you know, we still do have that parental choice accounted for in the bill. So that's really what the bill does. 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? Seeing none. Senator, would you like to close for your bill?
Senator Clarke Tucker
Unverified
6:36
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 we really feel great about this bill, and thank you very much for your time. We'd
appreciate a good vote. Thank you. I have a motion do pass. All in favor, say aye. Aye. Opposed, say nay. Thank you. Your bill has
Senator Clarke Tucker
Unverified
6:57
passed. Appreciate you being here. Thank you 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? Okay, if you'll go to the end of the table and please introduce yourself. House
Representative Cindy Crawford
Unverified
7:27
Bill 1738. Hello, Madam Chair. Cindy Crawford, District 51. Thank you. You're recognized. Thank you. May I bring An expert witness with me?
Yes. Thank you, Madam Chair and members. I have with me Lieutenant Colonel Retired, U.S. Army. He's also the Secretary of the Arkansas Veterans Coalition, John Posey. So I'll start out and then I'm going to turn it over to him. Members, 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 an act to amend the law concerning benefits provided to disabled veterans to provide sales and Use Tax Exemption for Disabled Veterans. Just wanted to share a little bit that people don't realize that a large number of our veterans who are disabled
live in poverty. And John Posey knows more about that than I do, so I'm going to turn it over to
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him. Thank you, Representative Crawford.
Speaker 41
8:59
As Cindy said, I'm here representing the Arkansas Veterans Coalition, which is a coalition of main veteran service organizations like American Legion, DAV, Veterans of Foreign Wars. And we have also other community partners like Gold Star Families that are members of our organization.
And we represent roughly, we estimate around 500,000 of the veterans, military, active, retired, and their families and dependents. This bill was a direct result of a retreat of veterans last July at the Rockefeller Center. We had veteran delegates from all over the state, from all corners, Jonesboro, Mena, Little Rock, Fayetteville area, Mountain Home area. And each delegate was to bring issues that they could possibly we could approach the legislature with to help veterans in Arkansas.
And so we had 25 delegates, we narrowed these 25 issues down to the top five, and this issue was actually number one in priority for the Arkansas Veterans Coalition. Who are 100% disabled veterans? I'll try to speak through this quickly, I know you have a lot of business. But 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 who the VA has determined are totally impermanent, 100% physically disabled through training, combat accidents, or other injuries.
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. They're men and women that have sacrificed their health, their quality of life, and their life longevity in service to our nation. They are mainly enlisted, junior enlisted, non-commissioned officers. There are officers in there, but not many. They are the ones that are the tip of the spear. They're typically Army and Marine Corps, although the other services are represented,
but Army and Marine Corps are the most prevalent of 100% disabled veterans. They're the ones in closest proximity to the enemy. 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. Do other states provide similar exemption? Yes. Our neighbor to the west Oklahoma has had this law since 2006. And then they further amended it and extended it to the spouses and the unremarried surviving spouses
of 100% disabled veterans that have passed on. The fiscal impact, I'm sure you'll be very aware of that. You know, there are less than, there's probably close to 8,500, 100% total and permanent disabled veterans in Arkansas, and 48.8% of all the veterans in Arkansas are over 65. So the veterans are aging out 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 storm are right behind them.
So this law, in our mind, is targeted for the Iraq and Afghanistan veterans, the younger veterans that are here today. You know, there have been some opposition, and we understand that. You know, one would be we had heard or I had heard the Retailers Association might be against this. You know, Oklahoma's had this for going on 20 years. The point-of-sale registers or computers, if you will, have the capability to carve out things, which they already do in Arkansas even,
for veteran discounts on Veterans Day or other discounts. from organizations that are already tax-exempt in this state. So, you know, it seems like that is something that, you know, in a computerized age could be overcome. You know, why should we support this bill? You know, our nation makes a contract with the young people of this country, and we have enjoyed an all-volunteer force since the Vietnam War, since after the Vietnam War. 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 does it 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. You know, it kind of, the one thing that I kind of bristle at is it seems as though veterans in Oklahoma or are valued more than in other states around them because they've been extended this benefit.
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? You know, $29 million or whatever a year that I may have seen in the DF&A estimate that, I don't know, it just, you've got to put a price on everything, I guess. But the Arkansas Veteran Coalition statewide membership, We respectfully ask you to support this bill. I know you 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 to quote a friend of mine, this is not a matter of money, but it's a matter of priorities, and it's the right thing to do. Thank
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you very much. Thank you. Any questions, members?
Appreciate you coming down. Members, do we have any questions for Representative Crawford? Seeing none, 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 it's
Mark Diggs
Unverified
15:03
Mr. Mark Diggs. Mark Diggs: Thank you, Madam Chairman and members, excuse me, let me get situated. My name is Mark Diggs, 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 have already seen me here, supporting other bills, I'm not here to represent them. And although I'm a lifetime member of the VFW, DAV, Military Oil and the Purple Heart, and Vietnam Veterans of America, I'm not here to represent them. I come to represent a 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 Vietnam. I'm one of the few officers that this impacts, although there's others. I've got two Purple Hearts, Ron Starr, several other Ballard's Awards. If you go to the treasurer's office and look at the Arkansas Military Veterans Hall of Fame display pretty closely, you'll see my name.
So, I feel appropriate to speak to this. And I've had the pleasure of working with a couple of representatives on this committee. Representative Wing, Representative Rye, 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 who are 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 an 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 going to say quickly that this is not about money. As a Vietnam veteran, when I came home, we didn't get a welcome home. We didn't get the parades. we tried our best to actually hide our service in our resumes because we were disdained. Fortunately, over time, people were able to separate a non-popular war from the veterans that fought 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 are gonna be looking to say, are we gonna get another insult? Cuz 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 this state, half of us are going to be gone within 10 years. I'm way past my sell by date, but I'm going to try to hang around as long as I can. But veterans bring in $4 billion of economic impact to this state because of the federal dollars that fall them through GI Bill, home loans, pensions, retirements, VA healthcare systems and so forth.
That's $4 billion that they bring in that we don't have to have taxes raised 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 error 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.
Thank you for coming. Members, we have any questions? Seeing none, thank you for your testimony.
I don't see anyone else signed up to speak for or against the bill. Is there anyone else who would like to speak for or against the bill? Seeing none,
Representative Cindy Crawford
Unverified
20:40
Representative Crawford, would you like to close for your bill? Yes, thank you, Madam Chair. You guys have heard from some of the greatest, and 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 going to 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 going to 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. I appreciate you being here. Members, we're going to go back up to HB 1699. Representative McCullough, if you will
introduce yourself for the record, and you will be recognized.
Representative Tippi McCullough
Unverified
21:53
Good morning, committee. Representative Tippie McCullough, District 74, bringing to you this morning HB 1699. This is a bill that has come up out of some of the mental, I'm sorry, I'm going to go ahead and, Representative Vought's here with me now. Representative DM
Representative DeAnn Vaught
Unverified
22:10
Vought, District 87. Sorry, I was running from education. We're bringing 1699 today.
Representative Tippi McCullough
Unverified
22:16
This is one of our bills that has come up out of our mental health working group. This is a 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 as a small exemption, and now it's a year-round exemption in Tennessee. But the reason we're bringing it is that this is a really proactive way for us to have safety devices and storage devices for gun owners to, firearm owners to, when they go in, to buy their firearms. to go ahead and get these devices to help keep them safe. And that's safe from children that might be in the house.
That's safe from somebody who might be considering suicide at the time, veterans, anybody having a mental health crisis, just a way to keep these firearms safe. This is a short period of time in August when we have our other tax holiday with our school supplies. And it does have a fiscal impact, as I'm sure you've seen. And I think every bit of that would be worth us paying to be able to keep some of our citizens safe.
Representative DeAnn Vaught
Unverified
23:37
Brett Ballett, would you? I would also say that it would probably also help us sell more of those
and keep more people safe. So I know it has a little bit of a physical impact, but in reality, we can't put a cost on people's lives,
and I do think that it would help us sell more of them. Thank you. Members, do we have any questions?
Seeing 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 or against the bill? Seeing none, Representative McCullough,
Representative Tippi McCullough
Unverified
24:15
would you like to close for your bill? Yes, I believe I'm closed. I think we said what we needed to say. It's a pretty simple thing just to try to add some safety components to this. We know that most firearm owners 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?
Representative DeAnn Vaught
Unverified
24:38
And I would concur with that. We've been on that mental health group now for going on to our fifth year now, and this does come up quite often. Like 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 during those crisis
Representative Tippi McCullough
Unverified
25:04
times. Also in August, that's a little bit right before hunting season also.
So we know that a lot of hunters especially are really good with firearm safety. But once again, just another added component to help with that, keep that in people's minds. And we want to thank DF&A for working with us on trying to figure out the best aspect to attack this from and helping us with all that. Thank you. Thank you all for presenting.
Appreciate it. Members, the next bill is going to be HB 1750, which is mine, so I'm going to have co-chair the chair.
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. This is a tax on businesses just for being a business that they pay every year.
That'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. And with that, I'm opening it up for discussion. All right, members, you've
heard an explanation of the bill. I'm going to
take questions. Representative Lundstrom, you're recognized for a question. Yes, thank you. I'll be up front. This is probably one
Representative Robin Lundstrum
Unverified
26:57
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 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 businesses how much effort and time it takes on our end, and 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.
To 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 whole web of stuff you go down. Yes, it does. I
Representative Robin Lundstrum
Unverified
27:50
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, as we don't think about it, is what is the cost to administer 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 that information? I think we'd find that there was a substantial savings of not having to do that any
Representative Robin Lundstrum
Unverified
28:25
longer. I couldn't agree more. Thank you for
bringing this bill. All right, Representative Eaton, you're recognized for a question. Sure,
Representative James Eaton
Unverified
28:33
thanks. I understand if we take the money away, 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 that?
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
Representative Les D. Eaves
Unverified
29:10
corrected. And that would be pretty simple. Representative Eaves, you're recognized for a question. Thank you. Can the Education Adequacy Fund handle losing $28 million?
I believe it can. Representative Kavanaugh, I know there's many states around the country that
don't have a franchise tax. Have you looked at 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 going to have franchise tax. I mean, it's something that's been going away. I mean, 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 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 are in the distinct minority of states that levy this tax.
Representative Jim Wooten
Unverified
30:17
Representative Wooten, you're recognized for a question. Thank you, Mr. Chairman. Chairman Kavanaugh,
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 we're taking away from Education Adequacy Fund reduction of $28 million. It's not the fault of businesses, but it's the fact that we've created this situation, and it directly impacts public education. And we give $65 million this year to education freedom accounts and only $32 million to the Department of Education for secondary education.
And like Representative Eve's, I'm concerned about the loss of $28 million more. We're already giving away over $200 million this year. All right, $90 million has been set aside and $90 million has been approved. My question is, how do you feel that the Education Adequacy Fund can sustain a $28 million reduction? Would that not be in violation of what the court order states that we must address the adequacy funding?
I don't think so. think if you look at the adequacy funding account balance, it's 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 as you brought out, we're by the law to fund education adequately. It doesn't say you have to have a fund 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 education and understanding the process we're at. We have to fund public education first before we fund anything else.
Speaker 95
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Thank you, Mr. Chairman. Thank you, Ms. Kavanaugh.
Representative Kavanaugh, do you or does anyone else know the
history of how 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. DFNA 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, but I really haven't. I'm not that
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old. I was definitely not insinuating that.
I see some heads shaking that 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
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it's something we need to talk about. Representative Wooten may know. Well, he was signaling to me that
Representative Jim Wooten
Unverified
33:47
he wanted to chime in. This point has been made numerous times before the Education Committee. It doesn't seem to restore the adequacy funding as a result of the federal court ruling that said we must do this several years ago.
And so that's the history. I mean, it's short, very clear, very to the point. And let me make this point. You can't take, in the ending final analysis of the education freedom accounts, you cannot take $400 million out of the education fund or $400 million out of general revenues and it not impact the amount of money that you're putting in public education.
I've said enough. Thank you. All right.
Representative Robin Lundstrum
Unverified
34:41
Representative Lundstrom, you're recognized. Thank you. 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 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 overregulating businesses,
and I'm thankful that you brought this bill. And I would say, wouldn't you agree, but I'm going to count she would. Thank
you. All right. Are there any further questions from committee members? Okay. 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? Okay. 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 the Education Department to be able to continue that funding. I think this is 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. At this point, she and I are going to switch spots, and I'm
going to run House Bill 1804. Representative
Ray, if you'll introduce yourself for the record, please.
Thank you, Madam Chair. David Ray, State Representative, District 69. With your permission, Madam Chair, I'd
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like to allow my guest to introduce himself. You're recognized. Good morning. I'm Anton Janik. 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. House Bill 1804 clarifies that vegetation management activities in utility right-of-ways are not subject to the sales tax.
The tax policy reason for this bill is that this is a business input. Inputs are typically exempted because if you don't, you end up with what economists refer to as tax pyramiding, 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. At some point, DF&A changed their interpretation about how these sorts of services were treated for tax purposes.
And there's some discrepancy, there are varying opinions, I guess I will say, about whether
that interpretation is correct. And so at that point, at this point, I'd like to invite my guests here, Mr. Janik, to explain that issue in more detail. So,
Speaker 122
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vegetation line management services refers to the activity of removing trees and brush and other vegetation
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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, DFA 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 can't be used to mow grass and isn't. That equipment is just used 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.
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 adopted 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 one 2018 opinion, one taxpayer asked if the spraying of a chemical to retard the growth of vegetation in pipeline and utility rights-of-way was taxable. Mr. Tice found that "spraying a right-of-way to clear away vegetation is not a taxable service close quote. Later in that opinion he says quote a review of your clients activities in light of the law and rules cited above reveals that your client services include the application
of chemical spray to retard growth or eliminate growing vegetation does not come within the definition of landscaping. Landscaping includes the installation preservation or enhancement of ground covering. The chemical services provided by your client to clear vegetation do not install, preserve, or enhance ground covering. Accordingly, those services fall outside the scope of taxable landscape activities. In another 2018 opinion, the taxpayer's business took big mulching machines
to 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 of 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 services illustrated in those photographs are also not lawn care services. Finally, in another DFA opinion, this one drafted in 2002 by 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 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 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,
Energy tells us that their work in Louisiana and Mississippi and Texas, this vegetation line management service is non-taxable. OG&E says the same thing in Oklahoma. So, Arkansas is 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. These are additional costs that these utilities will pass through to their rate-paying customers. and that's us. For that reason, we ask you
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to clarify this bill in favor of the utility's work. Thank you. Thank you,
members. Do we have any questions? Representative McGrew, you're recognized for
Representative Richard McGrew
Unverified
44:47
a question. Thank you, Madam Chairman. 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 on the line. So by decreasing this expense, do you think it would allow them to continue to do more trimming and in the end keep us
from having less power outages? Yes, sir. I very much do. I think
Speaker 125
45:14
the utilities are very focused on their duties under the law to preserve our power. But the cost and expense that keeps rising is something that
is a constricting factor, and that here, by reducing that pressure in that manner for very reasonable small incidents of tax, helps that situation and provides more resources to go out and do that hard work of keeping trees and vines out of the power lines. Thank you. 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 record, please.
Speaker 137
46:01
Thank you, Madam Chair, members of the committee, Paul Gehring, 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
46:18
becomes taxable. How is that possible? Well, there is a levy for the collection and disposal of solid waste. So I'd have to review the exact opinion that Mr. Janik is discussing to see exactly what the context was. But yes, solid waste 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. We all understand when we take debris, we have to pay for that debris, but I mean, the way he described it, 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, I'm confused.
Speaker 141
47:13
General Assembly enacted for landscaping services as well as commercial or non-residential lawn care. The statutory language that the General Assembly used, I believe those levies were enacted 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. What we're talking about, particularly in this opinion, we're not talking about landscaping services.
We're not talking about planting bushes, trees, things like that. We're talking about lawn care, which doesn't apply to residential lawn care. It only applies to non-residential lawn care. And in the definition of lawn care, it pertains to the preservation or maintenance of ground covering, which is very broad. The rulemaking also provides that chemical spraying is the maintenance.
Weed control is the maintenance. We do understand that on a right-of-way, there's going to be situations where there's going to be both vegetation that is in the form of weeds, grasses, things like that. There's also going to be trees that are going to be removed. The rule speaks to that tree trimming is not lawn care. So the rule is 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 business is performing is a taxable service. And if they are also performing non-taxable services, they have to make sure that they are separating those services out on their invoice to make sure that the entire invoice is not taxable.
Okay, so I'll just make sure I understand. You think tree
trimming is not part of landscaping, But you think removing debris
Speaker 141
49:27
is part of landscaping? So there is a, landscaping is generally planting. What we're talking about, I think, in this bill is what is taxable in Arkansas, which is taxable lawn care of non-residential property. And in our definition of lawn care, tree trimming 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 is getting charged tax on a combined invoice when
Speaker 149
50:13
they're doing multiple things for a customer, some of which are taxable, some are
not. 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 going to be able to figure out when my employees out there doing a job, if they're even going to 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 DF&A 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 with
Speaker 141
50:59
that, I'll— And Representative, I agree. There's a greater need for clarity in the law as to— because when the General Assembly enacted these levies of tax on these services, They didn't provide a great deal of definitions of what would be included and left that to the department to do rule promulgation. Okay, I appreciate that.
Representative Jim Wooten
Unverified
51:22
Representative Wooten, 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 service? Representative Wooten, it would depend on whether or not you were cutting. Hold up. I don't need any more depends.
I need a direct answer. I don't need any more of that. I mean, I've heard all I want to
hear as it relates to depends because that's bureaucracy talk. I want to know, would that
Speaker 157
52:20
be a taxable service? Only if it's commercial property. Only if it's non-residential property.
Representative Jim Wooten
Unverified
52:29
Another question. And so in other words,
if I'm clearing my land or have it cleared, and they use a sickle or a lopper or some other device that's not mechanical, then I don't have to pay any sales tax.
Speaker 157
52:50
Is that correct? This is non-residential property
Representative Jim Wooten
Unverified
52:57
the important point. Okay, they say it's residential property. You mean you differentiate between cutting a tree with a lopper on commercial property from that of non-residential? Yes, sir. Ladies and gentlemen, I hope you're listening, because that's the bureaucracy totally out of control.
When you can differentiate between a lopper used on personal property and a lopper used on commercial property, that's, thank you. Thank you, Madam Chairman. I think, I hope
I made my point. Representative Lynch, you're recognized. I think, well, I'll make it real simple.
Representative Roger D. Lynch
Unverified
53:42
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 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? Seeing none,
don't have anybody to speak up for against the bill. Is there anybody the audience would like to speak for 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 to our co-ops, because as it was mentioned earlier, 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 wondering. 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 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 hopefully we'll clarify this down the road. And I appreciate your
attention today. I'm closed. Thank you. Thank you for presenting. With that, Representative Torres, we're here. If you're here, if you'll introduce yourself and you'll be recognized.
And this is HB 1698. And
as a reminder, we won't be able to take a vote, but he'll be
Representative James Eaton
Unverified
55:45
able to present for us. If you'll only introduce yourself, please. Yeah, thank you, Madam Chair, House members. Randy Torres, District 17, Siloam Springs. This bill, 1698, is a plan to change the income tax rules in Arkansas for people who use health care 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 health care 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 a similar cost-sharing program for them.
Here's what it does, oh, as far as the activity around these home, I'm sorry, these healthcare sharing ministries, 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. Tax-free employer contributions. If your employer pays for your membership in a health care sharing ministry 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. 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 money, and consequently putting
Representative Randy Torres
Unverified
57:52
those savings back into the economy. So with that, I'll take any
questions. - Thank you. Members, I see any questions. Representative Eaton,
Chair
Unverified
58:04
you're recognized. - Is this classified as insurance?
Representative James Eaton
Unverified
58:09
- Not officially, it's not regulated, but it is an alternative means for people
to get their healthcare costs covered by participating in this program.
- I understand that. So with that, are you able to take the tax deduction by purchasing insurance and then make an additional deduction by
Chair
Unverified
58:30
joining this program? Well, I wouldn't suspect that
Representative James Eaton
Unverified
58:35
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? 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 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 and taking the tax deduction on that side. Yeah. Also, while I have insurance, just double, I'd be concerned about the double abduction there.
Representative Randy Torres
Unverified
59:18
Yeah, I wouldn't suspect that that would be a problem. Okay, thanks. You bet. Representative McGrew,
Representative Richard McGrew
Unverified
59:26
you're recognized. Yeah, question just so I understand. My county self-insures their employees, so would this affect them? No, sir. Okay. 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 or against the bill?
Thank you. Representative Torres, would you like
Representative James Eaton
Unverified
59:53
to close for your bill? Yes, Madam Chair. Thank you. 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. Health Bill 1698 shows Arkansas is serious about practical people-first solutions.
And if we vote yes on this in the future, it will make health care better for everyone in our state. And with
that, I'll close. Thank you. Appreciate you presenting this to us. Thank you for your time. Thank you.
With that, we're going to 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.
Representative, if you'll introduce yourself for the record, you'll be recognized.
Representative Rick McClure
Unverified
1:01:05
Rick McClure District 29. This is a very straightforward DFA bill. We all know about the deduction on our mileage and the rates are 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
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 a dollar a mile, they'll come back and talk to
us. Thank you, Representative McClure. Does anyone have any questions? Seeing none,
I don't have anybody signed up to speak for or against the bill. Is there anyone? Oh, Representative McGrew, you're recognized. There's a
Representative Richard McGrew
Unverified
1:01:52
question on this. By putting this in their hands, it could allow them to make the deduction less rather than more.
Representative Rick McClure
Unverified
1:01:58
Is that correct? I'll refer to DFA
to answer that. Paul, if you will, introduce
Speaker 141
1:02:11
yourself again for the record. Thank you. Paul Gehring, DFA. So, Representative McGrew, we fully intend through this legislation to as closely match the IRS rate as much as possible 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. 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 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 and do it in a manner that is fiscally responsible for the state and for taxpayers.
But definitely, that is our goal. The reason that we can't just automatically match whatever the IRS does is because our Constitution limits our ability to match whatever the IRS is doing without some type of 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 10, 15 years down the road that we need to possibly look at raising that
dollar limitation. But right now we think a dollar would provide sufficient leeway
Speaker 149
1:03:38
and also that guardrail that we could not exceed it. Thank you very much. That's a good explanation. So
Representative Richard McGrew
Unverified
1:03:45
your full intent is to match the federal guidelines. Absolutely. Yes. Thank you. Thank you, members. Any other questions? Seeing none, Representative McClure,
would you like to close for you? I'd like to close for the bill. And since we're able
Representative Rick McClure
Unverified
1:04:01
to vote on this one, I am assuming we are voting on this one. Is that correct? Then I make a motion do pass.
I have a motion do pass.
Any discussion on the motion? Seeing none. All in favor say aye. Opposed say nay. Thank you. Your bill has
passed. With that members we're going to go back up to Representative Eves at HB 1807.
Representative, if you will introduce yourself for the record and you'll be recognized.
Representative Eaves, we have your amendment, if you will present that first so we can adopt it. Thank you.
Representative Eves, if you'd like to present your amendment. Representative
Representative Les D. Eaves
Unverified
1:05:31
Eves, District 58, members, the amendment is adding several House co-sponsors and a Senate co-sponsor and has just one line that we had
to clean up in the bill. Do you have a motion to adopt? I
have a motion to adopt the amendment. All in favor say aye. Aye. Congratulations. You can present your bill
Representative Les D. Eaves
Unverified
1:05:50
as amended. All right. And there may be a point, Madam Chairman, that I'll have someone come up to give some more information.
But, colleagues, what this bill is doing is trying to clarify a situation we have with 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 use tax on the lease portion of the income on that aircraft. So this bill would clarify who qualifies for this option. It will clarify a longstanding 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% of the acquisition cost of the aircraft. And that's an industry standard, and 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-dollar fiscal impact. That is only if we allow DF&A to double tax that purchase.
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 determination of a recent case in front of the Tax Appeals Commission. And I really want to avoid getting too deep in the legal aspect of that case because it's been appealed to circuit court, I think it is. But if you'll allow, I've got Mr. Robbie Wills that can give you some background on that information.
I want to know, too, Robbie, you want to
Speaker 193
1:07:40
come on up? Well, I'll wait till he gets here
and we'll go into that some more. Yes, and Mr. Willis, if
Speaker 194
1:07:54
you will please introduce yourself for the record. Thank you, Madam Chair. I'm Robbie Wills, WSU Consulting. You want to add anything to what I said? Yes, sir. Absolutely. So our firm represents a number of stakeholders in this. 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 bought an aircraft with the intent to lease it to a third party. They're not an aircraft dealer. So what they did on the advice of their tax professional who followed decades of policy here in the state,
is 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. After doing that for a number of years, my client was audited by DF&A. They thought, okay, well, we've got records on our lease, should be fined. Well, they were assessed a million dollars by DF&A, 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 has not only caused great expense to my client to have to challenge this at the tax appeals court or commission,
and now DF&A has appealed it to circuit court to get a judge to rule on it. My client has had to lawyer up and go to circuit court, apparently, to get a judge to say the legislature didn't intend for this to happen. So it's just 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 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, 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 you personally, and you know I'm a strong advocate of the legislature not ceding prerogatives to anyone else. So, this bill, as Representative Eve says, will clarify the definition of who is an aircraft dealer. 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 two 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 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. 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 DF&A on that. So, again, this bill does nothing other than clarifies what the existing law is, what the policy has always been until this case came up in the last year or so,
And also prevents what I think DF&A is worried about is people cheating, you know, setting up a lease that's a dollar a year. Well, you can't do that. You couldn't do that anyway. This will prevent and show everyone where the line is so that there's absolutely no ambiguity. So with that, I'm probably too much information,
Representative Les D. Eaves
Unverified
1:12:02
Representative. Thank you. And I think it's important to know that the fiscal impact you
see in front of you only exists the way you see it now if DF&A is allowed to collect a tax that the Tax Appeals Commission said they should not.
So I'd be happy to take any questions. Okay, so something you said got
my little brain working. I apologize. I know. And sometimes my brain working is a little scary. So when you said that a dealer holds it into inventory for two 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. Would
Representative Les D. Eaves
Unverified
1:13:13
you not agree? 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 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 know. So if we have any sort of tax policies 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
Representative Les D. Eaves
Unverified
1:14:14
dries up. So what happens then? Right, and also
we have some pretty well-respected facilities in Arkansas. Representative Maddox has an airport with a facility on hand there
that rebuilds engines and does a lot of other things like that, and they're very well-respected. I think we have some places up in northwest Arkansas that are very popular for avionics upgrades, autopilots, and things like that. 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 aviation-related businesses. So I just think we've got to be careful on how we treat this industry.
But more than that, we need to be careful about how we're taxing these things. And I think in this case, we're trying to do it twice.
And just one question I'll open up to other members. Your bill is not going to affect the double taxation of a plane
that's been held more than two years. This bill is not going to fix the fact that a dealer will pay sales tax on inventory that they own because they've had it for two years,
and then when they sell it, the end consumers again are going to pay sales tax.
Representative Les D. Eaves
Unverified
1:15:35
This is not going to fix that. No, no. I think you experienced the same thing in your industry as well. And
new cars and used cars are taxed the same way. No, we don't do that, and we
don't want to do that. Right. Yes. Just for the record, we don't want that bill. But
Representative Jim Wooten
Unverified
1:15:56
Representative Wooten, you're recognized. Did you have a question? Representative Wooten, you're recognized. Thank you, Madam Chairman.
Your question follows my tact, but correct me if I'm wrong, or clarify for me the difference between this
and what Representative Jed presented two or three sessions ago. Are you familiar with
Speaker 209
1:16:12
that? Representative Wooten, I don't have the brainpower you have, apparently. I don't remember
Representative Les D. Eaves
Unverified
1:16:17
that bill, but I believe Mr. Wills does. Representative Wooten, I believe
Speaker 194
1:16:22
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.
Representative Jim Wooten
Unverified
1:16:42
Okay. So that was Representative Jett's
bill. Okay, thank you for follow-up. So, who made the decision for the double
Speaker 211
1:16:53
taxation? Generally, DF&A. Thank you. Thank
you, members. Any other questions? Seeing none, I don't
have anybody signed up to speak for or against, except Mr. Willison.
He's at the table. Do I have any questions for anybody else before I go to for and against? Seeing none, no one else
to speak for or against. Representative Eaves, would you like to close for
Representative Les D. Eaves
Unverified
1:17:24
your bill? Yes, Madam Chairman. I have a question of the committee.
Based on what I just said, that the only reason we have a fiscal impact that shows this amount, And quite frankly, this amount mostly is from one client that is going through the process of an appeal. So again, the only reason we see a fiscal impact statement of this million dollars
is because DF&A is trying to collect a tax that the Tax Appeals Commission says they shouldn't. And they're appealing it, and that's certainly their right. But my contention would be that the fiscal impact is not correct, and it should be zero. And for those reasons, I'd like to ask the committee to let this be one of the bills we can vote out today. I'll make a
motion, do pass. Members, I have a
motion, do pass. Any discussion on the motion?
Seeing any, no discussion. All in favor of the motion, do pass. Oh, Representative
Representative Les D. Eaves
Unverified
1:18:24
Monson, sorry. I'll make a motion, do pass as amended, sorry. Yes,
we're good. That's what, no discussion, you're good with the motion,
do pass as amended? Oh, yeah, let's do this. We have a motion, do pass as amended. All in favor say aye. Aye. Opposed, say nay. Congratulations, your bill has
passed. And with that, we're going to go down to SB 503, Representative Eaton.
Speaker 217
1:18:53
If you will go down to the end of the table and recognize yourself. Thank you,
Speaker 151
1:19:19
Madam Chair. James Eaton, District 26. And if you introduce yourself, Paul, for the record. Yes, ma'am. Paul Gehring, DFA. Thank you.
Representative James Eaton
Unverified
1:19:24
I think the bill is pretty
Speaker 219
1:19:26
simple and straightforward. Do you want two or do you want me to? I'd be
Speaker 141
1:19:32
happy to. Sure. Essentially, if you are an employer in the state of Arkansas, you file an annual reconciliation every year that shows what you have withheld from your employees 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 request a waiver. The reason that we prefer electronic withholding of reports of their withholding statements is that if we get that electronic report of the employer's withholding at the end of January
and that taxpayer files, 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 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-2s 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 withholding electronically.
But with this change, we're going to save us approximately 24,000 actual W-2s that we would have to key in with 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, do I see any questions? Seeing none, I
don't have anybody signed up to speak for or against the bill. Does anybody in the audience would like to speak for or against? Seeing none, Representative Eaton, would you like to close for your bill?
Representative James Eaton
Unverified
1:21:40
Thank you, Madam Chair, members. I think when it
came to me with this, 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 tax saver. And I would actually move that we do pass
on this. Thank you. I have a motion to do pass. Any discussion on the motion? Seeing none, all in favor say aye. Opposed, say nay. Congratulations, your
bill has passed. With that, we're going to 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
fiscal impact. Representative Warren, if you'll introduce yourself for the record,
Representative Les Warren
Unverified
1:22:37
you'll be recognized. Thank you, Madam Chairman. Les Warren, Representative District 84.
This Will is being presented at the request of the tax collectors throughout the state. There has 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, I don't have anybody signed up to speak for or against the bill. Is there anybody would like to speak for or against the bill? Seeing none, Representative Warren, would you like to
Representative Les Warren
Unverified
1:23:38
close for your bill? I am closed for the bill, and
I make a motion, do pass. Members, I have a motion, do pass. Any discussion on the motion? Seeing none, all in favor say aye. Aye. Opposed, say nay. Congratulations, your bill has passed. With that, members, we're going to move down to HB 1685.
Representative Underwood, if you'll go to the end of the table and introduce yourself, and you'll be recognized. Members, we will be taking a vote
Representative Kendon Underwood
Unverified
1:24:10
on this bill today. 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 grocery tax in Arkansas. 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. the Biden-era inflation hurt 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 third 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 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 food ingredients, but it maintains local government's ability to tax groceries on 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. So importantly to the prepared foods exception, that does not apply to foods that were simply cut, repackaged or pasteurized. So essentially meat, produce, and of course eggs would be exempt from
the food and food ingredients taxation. I do want to note that I worked with Municipal League and the counties. They proposed some amendments to the bill. I accepted all of their amendments to the bill. The bill was also reviewed by the governor's office. They were good with all those changes as well. 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 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 income on food. It also makes Arkansas more competitive. Our neighboring states, Texas and Louisiana, have both eliminated this 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. By eliminating this tax, 67%
of Arkansans support this tax elimination, 74% of Republicans, 72% of Independents, and 53% of Democrats. And with that, I'm happy to take any questions. Members, do you see any questions? Seeing none, I actually have no one to
speak for against this bill signed up. Does anyone like to speak for or against the bill? Seeing none, Representative Underwood, you
are recognized to close for your bill. Committee, I just will
Representative Kendon Underwood
Unverified
1:27:08
say in closing, thank you for your time.
Thank you for hearing 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? Seeing none, all in favor say aye. Opposed, say nay. Congratulations, Representative. Your bill has passed. Thank you, Madam Chair. Thank you,
Committee. With that, members, we're going to go down to the last bill for the day, and it's HB 1636. Representative Ray, if you will introduce yourself again for the record, and you'll be recognized.
All right, committee, State Representative David Ray, House District 69. This
is House Bill 1636. This is the phase-out of Arkansas's soft drink excise tax. I am going to 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 explain three things about this. First is the background and how we got to this point. 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 two-thirds 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 pay-fors 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 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 third 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 approximately $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 $1.26 a gallon, the tax on cans and bottles and powders is levied at 21, I'm going to round to the nearest cent, 21 cents per gallon of finished product. That may not mean a lot to you, so I did some research to try and help this number seem 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, 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 six different funding streams that go into the Medicaid trust fund. So here we are today, 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 initiate a minimum
of a five year phase down of 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 the years that Governor Beebe 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 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, 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 certified and attested to in an annual report that DF&A 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 the folks that pay this tax are indeed paying their fair share, but that they're not being overly penalized. So when one of the revenue triggers is met on the sales tax,
then the excise tax will be reduced 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 proposed law that the tax could be phased out any sooner than five years. It could potentially take longer if the revenue triggers are not met. It could take six years, could take seven years, but it couldn't be any fewer than five years. So let me run through some of the reasons
that I think this is good policy. Number one, this tax, this is an economically damaging tax. The beverage industry in Arkansas directly employs over 1,600 people, including hundreds of people in the soft drink and distribution jobs. In fact, six months ago, 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 second largest industry in the state, behind only agriculture. Phasing out the tax would also help our restaurants, convenience stores, our grocery stores, vending machine operators, as well as consumers who enjoy these products. 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 three-fourths, so 75 percent, of all the
revenues from the tax on a finished product are paid by households that make less than a hundred thousand dollars 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 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 up in the way they were doing business. So the ones that were fortunate to survive, they get rewarded with having to pay the rest of this tax. 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 mentioned, 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. This is a problem anytime you get too cute by half 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 includes diet soda as well. And if you look at the market, 60% of the products, 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 canned coffee 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. Carbonated water. We don't really think of 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 excise tax. So workout drinks are included, vitamin water, even drinks like Propel, which is basically just water with electrolytes added. These are all subject to the soft drink tax. So it encompasses a lot more things than we think of 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. 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 phased theirs out last year. The next point I want to
make is that voters do not want these taxes. And you know, this topic was subject to a referendum in 1992 that was unsuccessful. And so because of that referendum 33 years ago, there are going to 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. Our state is, 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 reserves have billions upon billions of dollars in them.
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 percent and 63 percent, 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 the last thing I'll say about this 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. You know, most people don't know this, but very few states actually have a Medicaid trust fund. There's only seven 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 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 many of the reasons that I think this is sound policy. And at this point, I'll take questions from committee members. Thank you, members.
Thank you, Representative Ray. I have a quick question. So on the Medicaid trust fund, that's actually, we all know we've got, it's being
drawn down currently. Does your bill address replacing that? So the revenue that
goes away from the excise tax is going to be replaced with soft drink sales tax revenue, which will go into general revenue. as 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. There have been efforts in the past to try and put that money back into the Medicaid trust fund. Representative Fite tried to propose that. But the exact same people who were against this bill were against that proposal as well. And so, you know. Okay, I just want
to understand. Yeah. So you're going to take away
the soda tax, but you're going to put tax on, more tax on soft drinks?
No, there's not going to 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 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 reports from DF&A
that will be required in this bill is to ensure that the amount of money that is replacing the excise tax on the sales tax side It actually exceeds the amount that's being eliminated on the excise tax side. Okay,
so we're taking a 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— So it's going in just to GR?
It will go into GR, yes. Like it currently does
now. That's right. And it can be used for anything. It just can't just be used for Medicaid. It can be used for anything. It can be used for the LEARNS Act. It can 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 going to replace the revenue
that we're taking away from here to keep the trust fund solid.
That's the only thing I'm trying to figure out. Sure. To answer your question very directly, the excise, the sales tax on soft drinks is not going to be diverted from general revenue into the trust fund. It's going to stay in general revenue, but the excise tax will only go away if DF&A certifies that the sales tax revenue is coming in at an amount that exceeds
the excise tax that's being phased out. That's what the triggers provide for.
Okay, thank you. Members, Representative Lynch are recognized. Representative
Representative Roger D. Lynch
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1:46:53
Bray, the small part of our population that benefits from this excise tax, I'm getting a lot of text and emails from those people. They fear that with the reduction of the monies going into the Medicare trust fund, that the money they have to serve 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 five or six sodas. We're talking about four cents a drink. Can you guarantee me that the price of that drink is going to go down four or
five cents? So, let me you said several things there.
let me try to address them each
individually. So the first thing
was I think what you were asking basically is are people, in essence, are people going to 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 gradual, incremental, responsible phase
out that is contingent on revenue triggers, is specifically to lessen any impact that might exist. So, all of that was taken into account as we put this bill together. 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. 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 fund state police. So the idea and what I would say to those people who are concerned about that, the idea that we would just not fund Medicaid is about as ridiculous as saying we would not fund state police or we would not fund the schools. So that would be my reassurance to them. Senator Wooten, you're recognized.
Representative Jim Wooten
Unverified
1:49:52
Thank you, Madam Chairman. 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. The answer that I gave to Representative Kavanaugh's original question covers that. The sales tax on soda is gonna go into general revenue. It already is going into general revenue.
What the revenue triggers in this bill seek to ensure is that the amount of the sales tax that's coming in exceeds the amount of the excise tax that's being phased out over
time. - But you will not
Representative Jim Wooten
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1:50:43
give this committee a guarantee 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 revenue. so you won't guarantee that
Representative Jim Wooten
Unverified
1:51:11
the 45 million i 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 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 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 as it impacts the trust fund. And I know you've got built-in stuff, but you cannot guarantee us or the citizens or my constituents who are being affected, 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 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. I tried to explain that in my explanation of the bill, but I'll try to make it 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 this state prior to 1993. There are only seven 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 sound policy justification for why it's being done that way.
Representative Jim Wooten
Unverified
1:54:13
Thank you, Madam Chairman. Thank you, Representative Roy. Thank
Chair
Unverified
1:54:17
you. Thank you. Representative Lundstrom, you're
Representative Robin Lundstrum
Unverified
1:54:21
recognized. I think Representative Ray has answered this question, but who is 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? Representative Eaton, you're recognized. Thank you,
Representative James Eaton
Unverified
1:54:49
Madam Chair. So, Representative Ray, I've been told, as I understand, that 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 can 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 expended with hospitals, is my understanding. And that was
Representative James Eaton
Unverified
1:55:25
my understanding. This Medicaid trust fund, so it can't cut everything because it's only spent toward hospitals. Is that correct?
No, just the soft drink part. part,
not the trust fund as a whole, but the soft drink portion. Yes, yes, and
Representative James Eaton
Unverified
1:55:43
that is what I mean. The portion that it comes from the soda tax
is put into the trust fund.
And 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 of the trust fund and pay any provider Medicaid funds. So it's not just to hospitals, it's to anybody that gets paid through Medicaid.
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, we do have several signed up to speak for and against. The first one that we have signed up to speak against the bill is Bo Ryle. If you'll come down to the end of the table and introduce yourself and who you represent, and you'll be recognized.
Speaker 250
1:56:55
Thank you, Madam Chair. I'm Bo Ryle with the Arkansas Hospital Association. Appreciate the opportunity to be here. Also, I represent as chairman of this loosely affiliated group called the Healthcare Providers Forum, and we gather and talk about legislation, but we rarely agree on anything. But one thing we do agree on is to retain the soda pop tax. So 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 groups that oppose House Bill 1636, the Arkansas
Association of Area Agencies on Aging, Arkansas Chapter American Academy of Pediatrics, 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 the revenue that goes into the Medicaid Trust Fund, which funds Medicaid. 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 two-thirds vote of the house and the senate to take this tax away so as discussed 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 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 million, 86 million, 112 million. Year five would be 139 million. Impact over five 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, now seems like 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? Seeing none, thank you for your testimony.
We have someone signed up to speak for it, Nick
Mavris, I couldn't read your last name,
sorry. If you want to introduce yourself for the
Speaker 255
1:59:44
record, you'll be recognized. Nick Macris with MK Distributors out of Pine Bluff. A lot of great discussion here. And I was asked to talk about the impact that it has on a distributor. We are a small distributor, non-alcohol distributor out of Pine Bluff. We're also a beer distributor. Being in the beer business, we're used to excise tax.
And the soft drink tax is one that doesn't make as much sense. and I want to 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 to the end consumer 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
compared to your larger retailers. Ultimately, the end consumer is being charged more for the soft drinks that include, as Representative Ray talked about, more than just soft drinks. So there are suppliers who would reduce the cost to the retailer, ultimately reducing the price to the end consumer as well if this soft drink tax was to go away.
And I could guarantee that. I see what other states are charged. And then Arkansas
Speaker 256
2:01:24
is charged, Arkansas retailers are charged a larger amount at times.
Thank you. Members, any questions? Seeing none, oh, sorry. Representative
Representative Jim Wooten
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2:01:40
Wooten, you're recognized. So, would you guarantee, you will not guarantee that all distributors will reduce their price?
Yeah, I mean, I can't do that, no. So, we stand
the risk that that won't occur, it won't save consumers anything, but the consumer will still be out of pocket, whatever the soda tax is? Yes,
Speaker 258
2:02:02
I cannot guarantee what other distributors would do. I can guarantee you that our distributorship would. There'd be no reason to charge that additional tax. So you've got the guarantee from MK Distributors, but no one else. Thank you. Thank you, Representative Wooden.
Any other questions, members? Seeing none, thank you for your testimony. Thank
you. I do have a question for DF&A, if they could go to the end of the table. One just popped
Chair
Unverified
2:02:32
in my head, and Representative Ray doesn't know either, so. If you introduce
yourself, please. Paul Gehring, DFA. Thank you. When we're talking about the soda tax, I mean the tax on the soft drinks or whatever y'all classifies as a soft drink,
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
Speaker 141
2:03:04
on one of these items? Madam Chair, so we would not ask our retailers to report to break those out on the return. 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 analysis that we perform to figure out how much is being collected on soft drinks.
As Representative Ray mentioned in his presentation of the bill, back in 2017, there was the Act 141, which provided the most recent soft drink tax reduction that offset other revenue raisers and revenue reductions. We did a study at that particular time using a lot of differentiated information from the industry from statistical information to provide an estimate. But at the, as this bill provides,
it would be an estimate provided by, from DFA, our excise tax section, as well as our economists that work in DFA would work together to provide that information. But it would not be something that we would derive or ask our retailers to specifically report to us
Speaker 149
2:04:16
on their sales of soft drinks. Okay, so we're really, you're going
to 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 factors you've got. It would
Speaker 136
2:04:30
be an estimate based upon available data that we have, which would
include the collections that we have right now on
Speaker 141
2:04:36
reduced food and food ingredients, 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 not be asking the retailers to tell us what their sales are, because right
Speaker 149
2:04:51
now they are grouping those sales with all of their other taxable sales. That's what
I was trying to figure out, because they just group them together. Yes, ma'am. My other question is, we just voted to get out the grocery tax bill on the grocery taxes.
Was that going to affect the factors that you're going to be looking at
Speaker 136
2:05:15
to try to estimate? No, ma'am. But we're still going
Speaker 141
2:05:17
to have that basis of data because we're going to continue to collect the local sales taxes for food and food ingredients under that bill. So 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
Speaker 149
2:05:34
local jurisdictions, the cities and the counties, they'll be protected. They won't have their taxes affected by the bill that was recently voted out.
Okay. But if they choose to get rid of the sales tax, then one of your factors is gone. That's what I'm just trying to figure out is make sure that the data that we're getting for the estimate is good.
Speaker 150
2:05:54
So you feel comfortable that that is?
Speaker 141
2:05:57
If we were, we would still have other sources of data in case the General Assembly in a future session decided to exempt food and soft drinks, everything in its entire, 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 pool
Okay, I appreciate that. Sorry that I brought you. Has anybody else got a question
for DF&A? Thank you. That just popped in my head. Thank you, ma'am. 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. Against us next. So I'm trying to go down the list. Janet Mann, you've 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
2:06:50
Okay, then I'll get him next. Good morning. I'm Janet Mann, Deputy Secretary and the Medicaid Director at Arkansas DHS. I'm here primarily to speak against the losing of earmarked funds in the trust fund. Do not do tax work anymore. do more public health policy, wanted to speak on the purpose of the Medicaid Trust Fund and what it does represent to the Medicaid 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 have about six to seven 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 Medicaid trust fund or the soda pop tax account is the only account that we can use to, for any Medicaid expenses that is eligible for.
Speaker 265
2:07:56
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 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 dollar for the Medicaid budget. So it is very important for our budget to maintain that funding source.
So with that, I will
close and see if there are any questions. Yes, I have a question. So we're currently at the 70-30 match. It's around
Speaker 265
2:08:40
traditional. In traditional, we have approximately 71 and 29. They like to use a lot of percentage points, so we do round to 70-30. It does change every October 1. It's determined by a per capita formula at the federal level. We usually find out about three to six months in advance of what the future FMAP rate will be.
We do have a higher match rate for our expansion population is at 90-10. Okay. The reason I
ask 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 as the feds see us getting more prosperous, they make us pay more of our own Medicaid costs. So if they reduce or match, say, by 1%, what does that
mean that we have to pay in tax dollars to make up for that?
Speaker 264
2:09:35
Does anybody really know? It varies from year to year, so every percentage point changes, and so we've looked at different calculations. I'm
Speaker 265
2:09:43
trying to go off of memory, but a full percentage point, I believe, somewhere in the $45 to $60 million range. I would need to verify that from old calculations. So on the low end would be $45, on
the high end would be $60 for a 1% change?
Speaker 265
2:10:02
I believe so. We looked at it last summer.
I'm looking at DF&A, 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 October for
our budget. And how much of change did they give us on our last FMAP? How
Speaker 265
2:10:22
much reduction did they? It was not quite a full point. It went from 72% on September 30th to 71.14 on October 1. Okay.
And if, and I'm just talking hypothetical, so we don't really know what the federal level is going to 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. Deficit's too high. 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 going to 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 have to pay?
Speaker 265
2:11:13
It would increase the state match tremendously to pull down those federal dollars to maintain the
budget. And so if it's $45 million and they go down 10%,
we're looking at $450 million that we would have to come up with just to get the federal
match. If the assumptions are correct and it
Speaker 265
2:11:33
costs $45 million for one percentage point, yes. 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, 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 would really be replacing would only be the $132 to keep the $298, correct? Where it says the state share? Yes,
Speaker 264
2:12:27
I'm sorry. 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 the replacement of the annual.
So if we came up with 132 million in state budget, we could still get the 280 fed. It doesn't matter where it came from, correct? Correct.
Okay. All right, thank you. I'm going to let other people have questions. Representative Ray had a question. Representative Wayne, you're
Chair
Unverified
2:12:54
recognized. Actually, your last question was my question.
All right. Ms. Mann, appreciate your comments. So my question is, the agency that you work for is an executive branch agency. So I guess you're speaking against the bill. Is your position your position or is it that of the governor's?
Speaker 264
2:13:18
I'm speaking against the loss of potential Medicaid trust fund. I do
Speaker 265
2:13:22
work for an executive agency. I am sitting here in my official position, but I am not commenting on the debate of reducing a tax 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 fund? Well, I
Speaker 264
2:13:44
mean, I'm representing the agency. It's the Medicaid trust fund. But, you know, I do take it very seriously if we're going to lose annual funding.
All right. Thank you. Any other questions, members? Seeing none, 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
Speaker 272
2:14:16
table and introduce yourself for the record and you're recognized. Thank you, Madam Chair. Dennis Farmer with the Arkansas Beverage Association, and Representative Ray covered a lot of things great. Most of us wanted to sit down. Naturally, we were foreseeing this 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 give you a little bit more background of where we came from, why we agreed 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, okay, 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, okay, we can go with that because it's better if you're going to do something different to us. 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. It's better for the consumer because it doesn't artificially inflate the price. And just to real quickly sidetrack from that, Representative Wooten, you brought up about can we guarantee these prices will go down? Naturally, we can't because that's called price fixing.
But I can tell you that in the national chains like Walmart and Dollar 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. In 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 asterisk will change and it will go away 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 five steps over who knows how many years. It's going to be a very incremental change. But policy-wise, it's hard to defend having this tax on the wholesale level. And when you look at those other states that had a sales tax, in 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 DF&A after the '17 session. And I would say, one thing you can just look at over the weekend as you're thinking about this bill and the regressive nature of it, you pay the same two 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. And so it can be spent on anything. And I have to admit, every time we've talked about a soft drink tax, it seems like the parable should have been feeding the $5,000 with one soft drink
because it seems like our $40 million tends to fund everything once reducing this tax is brought up. Senator Hickey's bill does require that a detail what comes out now. And for this current fiscal year, you can go look at the report. issued to peer every month 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 on 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 that was in place to 2021 since to the end 2021 when the RSA was crafted it was decided
that was a redundant provision it didn't need to be there and so since 2021 the 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 the day. 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. How much did you say that got diverted from the Medicaid Trust Fund in 17, from the SOTA
Speaker 273
2:19:39
tax? In 21. Sorry, in 21, sorry. 5.9 million. How much? 5.9 million. 5.9 million. If you look at the
Speaker 272
2:19:46
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, that first cut would be percentage-wise a little bit larger than the version that happened in 21, but by the time we get to those $8.3 million reductions, it's going to be almost identical reduction or change, because really we're not reducing what's happened with Medicaid, we're just very slowly moving some of the funding from special revenue to general revenue, but the money's there. Do you know
what our Medicaid match was in 2021 with that reduction?
Speaker 272
2:20:24
21, well, you can tell me if I'm wrong, we were at the enhanced F-MAP at that point, correct? It should have been about .77 because that was
during the pandemic. Right. So we actually had a higher money coming in from the feds
Speaker 272
2:20:38
when we did that reduction. Which would mean that if there was a negative impact to be felt by moving that 5.9 from
Speaker 274
2:20:44
the trust fund to general revenue, it would have been exacerbated more because there was higher
FMAP to it. Actually, I think our FMAP was lower in the Medicaid
Speaker 272
2:20:54
because the Feds paid more during the pandemic. They paid more, which meant for every dollar that we spent, we got more from the Feds. Correct. It was basically one to four instead of three to seven
at that point. Anyway, thank you. Thank you, committee. Any other questions, members? Seeing none, thank you for your testimony. The next signed up to speak against it is Anna Strong.
Speaker 276
2:21:29
Not see. 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
Speaker 277
2:21:50
table and recognize yourself? Sure. Sheena Olson, Vice President of Government Relations for Arkansas Children's. Thank you. I'll be brief. And we often say, you know, 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. 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 want to 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, do we have any questions? Seeing none, thank you so much for your testimony. Members, I don't have anybody else signed up
to speak for or against the bill. Is there anybody else in the audience who would like to speak for or against the
bill? Seeing none, Representative Ray, you're recognized to close for your bill.
Thank you, Madam Chairman. I will just briefly touch on some of the points that were raised. So the opponents of the bill 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.
They argue that we have to replace the revenue. The interesting thing about that, first of all, the triggers in the bill ensure that the revenue is being replaced. But four years ago, they want it replaced in the trust fund is what they say. But four years ago, Representative Lanny Fite sat in this very chair that I am 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. And all the
Speaker 227
2:24:09
same people came to the end of the table and spoke against it then.
So, the next thing is, you know, they keep bringing up the match. The match, you know, this is going to affect the match. This is not $45 million. This is $100 and however many million. 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. And so where the money comes from is irrelevant to the match. When DHS spends money subject to
the Medicaid match, that's when it applies. And the argument that this is going to hurt vulnerable people, they are proffering that argument to tug at your heartstrings to try 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, 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 are in the process of phasing out the throwback rule over time, incrementally, gradually, we can do that. And with that, I'm closed for the bill. I ask for a good vote, and I make a motion due pass. Thank you, members. we have a motion due pass.
Any discussion on the motion? Representative McClure, you're recognized. Well, I've had four
Representative Rick McClure
Unverified
2:26:59
years to think about this since the last time I've heard this.
So 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'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 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 that are going to
make sure that we're not going to go backwards in funding on the Medicaid.
So, if we've got reports that say it's going to make sure that we don't go backwards, then the only way we can go is forwards with the growth of the economy and funding Category A. Now, I don't have reports here, 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
than 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 we don't do this. But the end
result is making sure that the programs are taken care of. And I think you've accomplished that, so thank
Representative Jim Wooten
Unverified
2:29:06
you. Representative Wooten, you're 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're guaranteed that that $45 million is going to be replaced immediately, forthwith, and we're not getting that guarantee let me also add this is 2025 there's a lot of things that's different today than were four years ago when we had when we had an 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, it's down 1,500 points, along with about 2,000 or 2,500 that it's gone down in the past three weeks. And let me 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 dependent upon the Medicaid fund. The trust fund is a great benefit to those recipients. It guarantees that regardless if the points drop, if it goes down, we'll be able to fund it. 45 million dollars 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 want to tell you that I guarantee you you will not realize a consumer drop in the prices. We've already lost 180 million dollars
that Washington has taken away from Arkansas. 180 million. Half of that's in Department of DHS. The other part of us in public health. They are doing what what they've got to do because we're going to pay the price if they don't deal with it. Thirty-six trillion dollars in debt, a trillion dollars a year for interest. We can't 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 a representative of an agency came forward and said hey this is going to hurt us contrary to what the governor's office has said and I'll tell you she could come up to my district anytime she wants to and tell my people and 880,000 other people in this state that are dependent upon the fund so again in completion and conclusion let me state that my position has been and
Mr. Farmer can guarantee this, I've told him more than once, if the money is guaranteed that 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 of Finance and Administration as it related to the sales tax and dropping and doing away with it. In 20, 30 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 without a guarantee that the money will be replaced. Thank you madam chairman. Representative Lynch
Representative Roger D. Lynch
Unverified
2:33:58
are recognized. First off I'd like to say that Representative Ray did an excellent job presenting
the bill. You know, my opinion, I don't notice that tax. It's such a small amount 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 motion do pass all in favor say
aye aye those opposed say nay no i'm going to say the eyes have it thank you representative ray your bill
has passed with that member thank you committee we have no other business we're adjourned
10 o'clock meeting a.m monday
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
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Representative Aaron Pilkington
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Representative Robin Lundstrum
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Senator Clarke Tucker
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Uh Dan
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Representative Cindy Crawford
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Mark Diggs
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Representative Tippi McCullough
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Representative DeAnn Vaught
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Representative David Ray Chair
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Representative James Eaton
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Representative Les D. Eaves
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Representative Jim Wooten
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Representative Richard McGrew
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Representative Roger D. Lynch
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Representative Randy Torres
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Chair
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Representative Rick McClure
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Representative Les Warren
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Representative Kendon Underwood
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