HB1910
To Allow A Deduction For Certain Qualified Business Expenses Under The Income Tax Act Of 1929.
Last Action (May 5, 2025): Died in House Committee at Sine Die adjournment.
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AI-Generated Summary
House Bill 1910 proposes to amend the Arkansas Income Tax Act of 1929 by incorporating the federal tax deduction for qualified business income as defined under 26 U.S.C. § 199A(a)-(h). By adopting this federal provision, the bill allows certain eligible taxpayers to deduct a portion of their qualified business income when calculating their Arkansas state income tax liability. The legislation specifies that this adoption applies to the federal law as it exists on January 1, 2025. The provisions of this act are intended to apply to tax years beginning on or after January 1, 2025.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill are owners of pass-through entities, such as sole proprietorships, partnerships, S corporations, and certain trusts and estates, who currently report qualified business income and would gain a state-level tax deduction mirroring the federal benefit.
Who Might Suffer?
The state government of Arkansas could be negatively impacted through a reduction in state tax revenue resulting from the additional deductions taken by eligible taxpayers. This potential decrease in tax collections could require budgetary adjustments or reductions in state-funded services to compensate for the loss of anticipated income tax receipts.
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