Laws in Effect January 1st, 2022

In the most recent special session, the Arkansas General Assembly passed legislation to reduce the top income tax rate for individuals from 5.9% to 4.9% incrementally over the next four years. For the tax year beginning on January 1st of 2022 the top rate has been reduced to 5.5%. In this year’s regular session the Assembly also passed the following tax measures which will take effect starting Saturday which begins the new year.

1. Act 376 reduces the registration fee for hybrid vehicles from $100 to $50.
2. Act 1013 reduces the sales tax from 6.5% to 3.5% on used cars priced from $4,000-$10,000.
3. Act 368 modifies the definition of “wages” in certain circumstances to exclude the amount of (ru-mew-neration) remuneration that exceeds the the lesser of the amount calculated under current law or $10,000.
4. Act 765 created the Law Enforcement Family Relief Check-off Program, which allows an individual taxpayer to designate some of their income tax refund to the program. This program assists the families of fallen law enforcement officers who were either killed in the line of duty or diagnosed with a terminal illness.