AR HB1002

Reduces individual income tax rates starting January 1, 2022, with the top marginal rate decreasing from 5.5% to 4.9%, and implements further reductions scheduled for 2023, 2024, and 2025 if the Catastrophic Reserve Fund is not drawn upon.

Reduces corporate income tax rates for domestic and foreign corporations starting January 1, 2023, with the top rate dropping from 5.7% to 5.5%, and includes additional reductions for 2024 and 2025 contingent on Catastrophic Reserve Fund transfers.

Adopts federal depreciation and expensing rules under 26 U.S.C. §§ 167, 168, and 179 as of January 1, 2022 for computing Arkansas income tax liability on property purchased in tax years beginning on or after January 1, 2022.

Creates a one-time inflationary relief income-tax credit for tax year 2022, ranging from $150 to $300 depending on filing status and income level, for resident individual taxpayers.

Declares an emergency based on a net general revenue surplus exceeding $1.6 billion for fiscal year 2022, making the act effective immediately upon Governor approval.