Arkansas Small Business Owners Applaud Passage & Signature of Tax Relief

April 11, 2023

Arkansas Small Business Owners Applaud Passage & Signature of Tax Relief

It’s difficult to overstate just how challenging the past few years have been for our local job creators. From the constant barrage of price increases to the persistent worker shortage and supply chain disruptions, Main Street has faced enormous obstacles. The tornadoes our state endured last month have only exacerbated these challenges. In fact, with inflation remaining the single biggest problem, a recent NFIB survey found that nearly half of small business owners nationwide don’t anticipate conditions to improve in the next six months. Another report found that 90 percent of owners who are currently trying to hire, found few or no qualified applicants for their open positions. That’s why small business owners here in Arkansas are relieved the Legislature passed and Governor Sarah Huckabee Sanders signed meaningful tax relief. It simply couldn’t come quickly enough. SB 549, introduced by Sen. Jonathan Dismang and Rep. Les Eaves, would immediately cut taxes for hardworking Arkansans by reducing the individual top rate from 4.9 percent to 4.7 percent and the corporate rate from 5.3 percent to 5.1 percent. Local job creators in particular will benefit from the reduced income tax rate, as most small businesses are organized as pass-through entities, meaning owners pay taxes at the individual rather than the corporate rate. Owning and operating a small business means dealing with thin margins, where every penny counts. When businesses pay less in taxes, they can do more of what they do best: meet their customers’ needs, take care of their employees, and support our communities. By employing nearly 500,000 Arkansans, small businesses are the backbone of our state’s economy. With a lower tax bill, Main Street businesses can also better compete with the big guys, who are often able to afford higher wages and generous benefits. Paying less in taxes will make it easier for small businesses to retain top talent, create new jobs, and expand their operations. All told, it’s estimated roughly 1.1 million Arkansans will benefit from a $124 million tax cut – and be able to keep more of their hard-earned dollars in their pocket – overnight. But what’s most exciting about SB 549, is what it means for the future of our state: eliminating the income tax altogether. Governor Sanders has committed to responsibly phasing out our state’s income tax and SB 459 is just the first step. Once the income tax is wiped out, Arkansas would have stronger footing to compete with neighboring states like Texas and Tennessee and grow our vibrant workforce. This tax reform comes on the heels of the Legislature’s passage of the Youth Hiring Act, which is addressing another top concern of small business owners: the worker shortage. Signed into law in early March, the bill is helping small business owners fill their open positions and leapfrogging the next generation of workers on the path to their careers. By making it easier to fill open job positions to providing $124 million in tax cuts, Governor Sanders and lawmakers in Little Rock are prioritizing Main Street’s recovery. NFIB members from across the Natural State will be able to do more of what they do best thanks to their efforts.

Topics:

Uncategorized

State:

Arkansas

Get to know NFIB

NFIB is a member-driven organization advocating on behalf of small and independent businesses nationwide.

Learn More