SB73
To Create The Access To Credit For Our Rural Economy (acre) Act; And To Provide An Income Tax Deduction For Certain Agricultural Loans.
Last Action (May 5, 2025): Died in Senate Committee at Sine Die adjournment.
Sponsors
AI-Generated Summary
Senate Bill 73, titled the 'Access to Credit for Our Rural Economy (ACRE) Act,' seeks to amend Arkansas state income tax law to provide a deduction for certain financial institutions. The bill allows eligible lending institutions, such as banks and state trust companies, to deduct from their net income the interest income earned on 'qualified agricultural loans.' A qualified agricultural loan is defined as a loan secured by personal property used for agricultural purposes or a loan secured by real property used for the production of agricultural products under specific lien and equity criteria. The primary purpose of the act is to incentivize lending to the agricultural sector by reducing the tax burden on lenders who provide credit to farmers and rural businesses. The legislation applies to tax years beginning on or after January 1, 2025.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill are eligible lending institutions, including national banking associations, state banks, and federal savings banks, which would receive a reduction in their state income tax liability. Additionally, the agricultural sector, including farmers and agricultural businesses, may benefit indirectly through increased access to credit and potentially more favorable loan terms as lenders are incentivized to expand their agricultural loan portfolios.
Who Might Suffer?
The primary group negatively impacted by this bill is the State of Arkansas, which would experience a reduction in total tax revenue due to the new income tax deductions provided to financial institutions. This decrease in revenue could potentially limit the funds available for other state-funded programs or government operations, depending on the scope of the deductions claimed by eligible institutions.
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