HB1787
To Provide An Income Tax Exemption For Certain Retirement Benefits Received By Law Enforcement Officers And Firefighters.
Last Action (May 5, 2025): Died in House Committee at Sine Die adjournment.
Sponsors
AI-Generated Summary
House Bill 1787 seeks to amend Arkansas state tax law to provide an income tax exemption for retirement benefits received by retired law enforcement officers and firefighters. The bill expands existing tax exemptions, which currently cover uniformed services, to include specific categories of municipal, county, state, and volunteer law enforcement and fire personnel. It defines eligible law enforcement officers to include police, sheriffs, deputies, state police, highway police, and detention facility officers. Firefighters eligible for the exemption include certified municipal or volunteer firefighters as well as those serving in the Arkansas National Guard. The bill also includes provisions regarding how this exemption interacts with other retirement benefit exemptions, stipulating that taxpayers may supplement this exemption with existing ones if their total benefits under this section are less than six thousand dollars. The proposed changes would become effective for tax years beginning on or after January 1, 2026.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries are retired law enforcement officers and retired firefighters in Arkansas, including municipal police, county sheriffs, state police, highway patrol officers, detention officers, and municipal or volunteer firefighters. These individuals would benefit from a reduction in their state income tax liability on their retirement income, effectively increasing their net disposable income during retirement.
Who Might Suffer?
The primary entity negatively impacted is the State of Arkansas, as the implementation of this tax exemption would lead to a reduction in total state income tax revenue. This decrease in revenue could potentially constrain the state's budget for public services or necessitate adjustments in other areas of the tax code to offset the loss.
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