AR HB1714

Creates the Elective Pass-Through Entity Tax Act allowing business entities (partnerships, LLCs, S corporations) with members holding more than 50% voting rights to elect to pay tax at the entity level rather than individual level.

Imposes a tax of 6.6% on net taxable income for tax year 2020, reducing to 5.9% for tax years 2021 and beyond, on affected business entities that elect into the program.

Allows individual members of affected business entities to exclude from their personal income tax the amount of pass-through entity tax paid by the entity multiplied by their pro rata ownership interest.

Requires affected business entities to make quarterly estimated tax payments and report each member's pro rata share of taxes paid; nonresident individuals may be exempt from filing personal income tax returns if their only income source is from affected business entities that file and pay taxes.

Effective for tax years beginning January 1, 2020.