HB1148
To Provide An Income Tax Credit For Certain Expenses For Baby Supplies.
Last Action (Jan. 17, 2023): Recommended for study in the Interim by Joint Interim Committee on REVENUE & TAXATION- HOUSE
Sponsors
AI-Generated Summary
House Bill 1148 proposes an amendment to Arkansas state income tax laws to establish a refundable tax credit for individual taxpayers regarding expenses incurred for baby supplies. Under this act, 'baby supplies' are defined to include diapers, baby formula, baby wipes, and prepackaged baby food. Eligible taxpayers may claim a credit of up to $1,000 per tax year for these expenses. If the credit amount exceeds the taxpayer's total income tax liability, the law mandates that the excess amount be refunded to the taxpayer. This legislation is intended to be effective for tax years beginning on or after January 1, 2023.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill are individual taxpayers in Arkansas who purchase qualifying baby supplies, particularly families with infants and young children. By providing a refundable tax credit, the bill specifically benefits low-to-middle-income families who incur significant costs for essential child-rearing items, effectively reducing their overall tax burden or providing a cash refund if the credit exceeds their tax liability.
Who Might Suffer?
The primary entity negatively impacted by this bill is the State of Arkansas, specifically its tax revenue collections. By creating a refundable tax credit, the state will experience a reduction in general tax receipts that would have otherwise been available for the state budget. Additionally, the administrative burden on the Arkansas Department of Finance and Administration may increase as they implement, verify, and process these new tax credit claims.
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