Accompanied by legislative leaders, Gov. Sarah Huckabee Sanders on Thursday announced a plan to cut Arkansas' top individual income and corporate income taxes.
The Republican governor said she and GOP lawmakers have agreed on a plan that would reduce state individual income taxes by about $100 million a year and corporate income taxes by about $24 million a year, retroactive to Jan. 1, 2023.
The plan will cover about 1.1 million taxpayers, she said.
"Arkansans will feel this tax immediately, and I don't think it can come fast enough," Sanders said. "This bill is aimed directly at the hardworking Arkansans hurting the most from inflation."
State Sen. Jonathan Dismang, R-Searcy, said Senate Bill 549 would reduce the state's top individual income tax rate from 4.9% to 4.7%, and would reduce the state's top corporate income tax rate from 5.3% to 5.1%, retroactive to Jan. 1, 2023.
The Republican-dominated Legislature is aiming to end this year's regular session within the next week or so.
Sanders unveiled the income tax cut plan after her predecessor, Gov. Asa Hutchinson, in August signed into law identical tax cut bills that accelerate the reduction of the state's individual income tax rate from 5.5% to 4.9%, retroactive to Jan. 1, 2022, and the state's top corporate income tax rate from 5.9% to 5.3%, effective Jan. 1, 2023.
The state Department of Finance and Administration projected that the measures would reduce state general revenue by $500.1 million in fiscal 2023 that started July 1, then by $166.6 million more in fiscal 2024, $69.5 million more in fiscal 2025, $18.4 million more in fiscal 2026 and $8.4 million more in fiscal 2027.