SB318
To Create An Income Tax Exemption For Certain Individuals Based On Income And Age.
Last Action (May 5, 2025): Died in Senate Committee at Sine Die adjournment.
Sponsors
AI-Generated Summary
Senate Bill 318 proposes a new income tax exemption for Arkansas residents based on age and income levels. Specifically, the bill would allow individuals who are at least 65 years of age and have an annual gross income of $25,000 or less to be exempt from state income tax. The legislative findings cite the rising costs of living, such as housing, utilities, and healthcare, as well as the challenges faced by seniors on fixed incomes as the primary justification for this tax relief. The bill is scheduled to take effect for tax years beginning on or after January 1, 2026.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill are low-income senior citizens in Arkansas who are at least 65 years old and earn an annual gross income of $25,000 or less. These individuals would see an increase in their disposable income due to the elimination of their state income tax liability.
Who Might Suffer?
The primary entity negatively impacted would be the State of Arkansas, as the tax exemption would result in a reduction of state tax revenue. Additionally, taxpayers not meeting the specific age and income requirements would not receive the benefit, and any potential state budget shortfall created by this reduction in revenue might necessitate future adjustments to public services or spending allocations.
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