Gov. Sanders signs tax cut measure, extends tax filing deadline for tornado victims

Gov. Sarah Sanders on Monday (April 10) signed a major tax cut bill into law and put forth an executive order to extend state tax filing deadline for citizens impacted by the March 31 tornadoes.

In a bill signing ceremony at the state capitol, Sanders and legislators who drafted and supported the tax cut joined her in a press conference.

“Today, I signed a $150 million personal income tax cut and $36 million corporate income tax cut — putting money back in 1.1 million hardworking Arkansans’ pockets,” Sanders said. “This is only just the beginning. We will continue to responsibly cut the income tax until we wipe it off the books.”

The tax cut proposal, SB549, reduces the state’s top individual income tax rate from 4.9% to 4.7%. It lowers the top corporate income tax rate from 5.3% to 5.1%. Arkansas lawmakers have been reducing the state income tax rates steadily since former Gov. Asa Hutchinson’s first term in 2015. The state’s top personal income tax rate was 7% at the time and was 4.9% when he left office.

For individuals, the tax break kicks in for anyone making more than $24,300 annually and is expected to affect 1.1 million Arkansas taxpayers.

Sanders also signed HB1045, which phases out the “throwback rule” over a seven-year period. The “throwback rule” refers to taxes paid by multi-state corporations based in Arkansas that must count revenue from product sales in other states that don’t require taxation.

Later in the day, Sanders signed an executive order to give a state tax extension to those affected by the March 31st tornadoes that ripped through Little Rock, North Little Rock, Jacksonville and Cabot as well as Wynne and parts of eastern Arkansas.

Sanders called on the Department of Finance and Administration to extend the 2022 income tax filing and payment dates from April 18, 2023 to July 31, 2023 “for those citizens who reside in or whose businesses are located in Pulaski, Lonoke, and Cross counties.”

The extension includes 2022 returns for individuals, subchapter S corporations, subchapter C corporations, pass-through entities, fiduciaries and estates, partnerships, and composite returns. Her executive order also extended to July 31, 2023 fees for title processing services and vehicle registrations and renewals for residents in the four counties affected by the storms.