AR HB1967

Reduces the top income tax rate for individuals, trusts, and estates from 5.9% to 4.9% for tax years beginning January 1, 2023 and thereafter.

Implements a phased reduction schedule, lowering the rate to 5.4% for the tax year beginning January 1, 2022, before reaching 4.9% in 2023.

Applies the 4.9% rate to income over $37,200 for taxpayers earning between $22,200 and $79,300 (effective 2023), and to income over $8,001 for taxpayers earning more than $79,300 (effective 2023).

Maintains existing tax bracket structures and bracket adjustment amounts while updating only the applicable tax rates within those brackets.

Requires annual adjustment of all tax tables in accordance with existing adjustment methods set forth in subsection (d) of the tax code.