LITTLE ROCK (March 31, 2023) – The National Federation of Independent Business (NFIB) here in Arkansas applauds Governor Sarah Huckabee Sanders’ plan to cut the state’s income tax. Following Governor Sanders’ announcement, NFIB State Director Katie Burns praised the proposal as a step forward for small businesses.

“Our small businesses face a myriad of challenges, from rising prices to the worker shortage. Cutting taxes for hardworking Arkansans will direct dollars back to business owners instead of sitting in government coffers waiting to be spent on more government programs. This plan will go back into the bottom line of small business owners so they can continue to keep Main Street communities across Arkansas alive by growing and creating jobs. We look forward to working with our new Governor, her team, and the General Assembly to make these tax cuts a reality.”

Background:

Because most small businesses in Arkansas are organized as pass-through entities, such as LLCs and partnerships, where owners pay taxes at the individual rate.

The Governor’s proposal would impact the more than 1.1 million Arkansas taxpayers who make more than $24,300. The tax cuts will total $100 million in personal income tax cuts, as well as $20 million in corporate tax cuts. The individual top rate will decrease from 4.9% to 4.7%. For Arkansas-based corporations, as well as those domiciled outside the state, the tax rate will decrease from 5.3% to 5.1%. The cuts will be retroactive and go into effect on January 1, 2023. The bill, SB 549, was introduced by Sen. Jonathan Dismang (R-Beebe) and Rep. Les Eaves (R-Searcy).