SB423
To Exempt From The Individual Income Tax Education Scholarships, Awards, And Grants From Nonprofit Volunteer Service Organizations.
Last Action (May 5, 2025): Died in Senate Committee at Sine Die adjournment.
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AI-Generated Summary
Senate Bill 423 proposes an amendment to Arkansas tax law to provide an individual income tax exemption for education-related scholarships, awards, and grants provided by nonprofit volunteer service organizations. The exemption applies to funds used for attendance at institutions of higher education, vocational training, or the repayment of student loans. This legislation seeks to reduce the tax burden on individuals who receive educational financial assistance from qualifying volunteer entities. The act is set to become effective for tax years beginning on or after January 1, 2025.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries are individual Arkansas residents who receive scholarships, awards, or educational grants from nonprofit volunteer service organizations. Additionally, students or individuals seeking vocational training who utilize these funds for tuition or student loan repayment will benefit from the reduction in their individual income tax liability.
Who Might Suffer?
The primary entity negatively impacted is the State of Arkansas, as the implementation of this tax exemption will result in a reduction of state tax revenue. Consequently, this may lead to a decrease in the total funds available for the state budget.
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