State Capitol Week in Review
From Senator Larry Teague
May 15, 2017
LITTLE ROCK – Acts 78 and 79 of 2017 created the Arkansas Tax Reform and Relief Legislative Task Force. The leaders of the Senate and House have appointed the panel’s membership.
There will be eight senators and eight representatives on the task force, which is charged with recommending changes to the state tax code for lawmakers to consider during the 2019 regular session.
Acts 78 and 79 are identical versions of a tax relief measure. One version originated in the Senate and the other one in the House of Representatives.
According to the acts, the recommended legislation should modernize and simplify the Arkansas tax code, while making it fairer for all individuals and businesses that pay taxes in Arkansas. Also, the changes should make Arkansas more competitive economically with other states and should provide incentives for job creation.
By December 1, 2017, the task force shall issue a preliminary report. Its final written report is to be released by September 1, 2018.
Acts 78 and 79 also reduce individual income taxes for more than 1.3 million low-income residents. When they take full effect they will save Arkansas families more than $50 million a year. The largest tax cut a single taxpayer will receive is $156 and for a married couple the saving will be $312 each year.
All individuals earning less than $21,000 will see lower income taxes. Those making less than $4,300, an estimated 120,000 Arkansas residents, will be taken off the rolls completely.
The tax cuts in Acts 78 and 79 will take effect in 2019.
Other tax cuts enacted this year include Act 141, which will completely exempt military retirement from state income taxes and will save about 29,000 retired Arkansas veterans more than $13.4 million a year.
Act 465 exempts sales taxes for manufacturers when they purchase equipment for repairs and replacement of parts. It sunsets an existing tax incentive program known as InvestArk.
The tax exemption will be phased in. In Fiscal Year 2020 the savings to Arkansas manufacturers will be only $230,000, but they will then begin to increase sharply. By 2023 the savings for Arkansas manufacturers will be more than $12.3 million a year.
The legislature lowered income taxes in 2015 by more than $100 million a year with the passage of Act 22. It reduces individual income taxes for middle class families whose annual income is between $21,000 and $75,000.
Act 1173 of 2015 lowers the state income tax on capital gains, and now saves Arkansas taxpayers almost $12 million a year.
AG Seeks More Tools to Prosecute Medicaid Abuse and Neglect
The Arkansas attorney general is one of 38 nationwide who have officially asked federal authorities for greater powers to investigate and prosecute Medicaid abuse and neglect.
The criminal cases usually involve health care workers taking money to which they are not entitled, by swindling it from an elderly Medicaid recipient. The financial fraud is often accompanied by physical abuse and neglect of the elderly person’s need for nutrition and hygiene.
The attorneys general want to repeal outdated limitations on their authority to fight Medicaid fraud, not only in institutions but also in the homes of Medicaid recipients. The Arkansas attorney general opened 112 criminal cases of Medicaid fraud last year.