HB1669

To Eliminate Barriers To Starting A New Business; To Amend Arkansas Income Tax Law; To Allow Certain New Businesses To Defer Paying Certain Income Taxes; And To Create The Arkansas Entrepreneur Extension Program.

Failed

Last Action (May 1, 2023): Died in House Committee at Sine Die Adjournment

AI-Generated Summary

House Bill 1669 aims to encourage entrepreneurship in Arkansas by reducing financial barriers for new businesses. It allows eligible new, locally headquartered businesses to apply for a waiver of state and local filing, permit, and licensing fees for up to five years. The bill also establishes the 'Arkansas Entrepreneur Extension Program,' which permits eligible new businesses to defer payment of state income taxes for up to five years. An 'eligible new business' is defined as a domestic business entity owned by individuals who have not owned a business in Arkansas in the previous five years. The fee waivers do not apply to mandatory expenses such as criminal background checks, examinations, tests, or medical screenings. The Secretary of the Department of Finance and Administration is tasked with creating the tax-deferral application process and promulgating necessary rules. The act is set to take effect on January 1, 2024.

Potential Impact Analysis

Who Might Benefit?

The primary beneficiaries are new, small-scale entrepreneurs and startup owners in Arkansas who have not held business ownership in the state during the preceding five-year period. These individuals benefit from reduced startup costs through waived licensing and permit fees, as well as improved cash flow management via the five-year income tax deferral program.

Who Might Suffer?

State and local government entities may be negatively impacted by a reduction in revenue generated from licensing, permit, and filing fees. Additionally, there could be a short-term reduction in immediate state income tax receipts due to the deferral program, which may create administrative burdens for the Department of Finance and Administration to manage, track, and enforce the collection of deferred taxes after the five-year period concludes.

Read Full Bill on arkleg.state.ar.us