State Capitol briefs: Local-income-tax ban clears panel

Local-income-tax ban clears panel

The Arkansas Senate Revenue and Taxation Committee on Wednesday advanced a bill that would bar local governments from levying income taxes.

The Senate committee sent House Bill 1026, sponsored by Rep. David Ray, R-Maumelle, to the full Senate. Under the bill, a county, municipality or other local government “shall not levy a tax on income.” Sen. John Payton, R-Wilburn, said state law currently allows local governments to impose an income tax, but no local governments in Arkansas impose an income tax.

He said Republican Gov. Sarah Huckabee Sanders has indicated it’s her intention to phase out the state’s income tax, and it could become tempting for local governments to back fill that by imposing a local income tax.