AR SB885

Establishes reduced income tax rates for residents, trusts, and estates located in economically distressed counties meeting one of four criteria: 10% population loss over the last decade, poverty rate 50% above state average, unemployment rate 135% or more of state average, or designation as a distressed county by the Economic Development Administration or Delta Regional Authority.

Implements a four-tier tax rate structure for eligible county residents: 0% on first $24,000 of net income, 5% on $24,001-$50,000, 5.5% on $50,001-$75,000, and 6% on $75,001 and above, compared to standard rates ranging from 1% to 7%.

Exempts partnerships, limited liability companies, and corporations located in qualifying distressed counties from state income tax, with exemption status remaining permanent even if county population subsequently increases.

Establishes that eligible county status is determined following each federal census and remains effective for 10 years.

Effective January 1, 2012.