Governor Asa Hutchinson signed the largest tax cut in the history of the Greater State of Arkansas on Thursday. The current maximum tax rate is 5.9% by the time it goes into full effect in 2025, the maximum tax rate for Arkansans will be 4.9%.
A statement issued by the Governor’s Office on Friday said that nearly two years ago the top tax rate on individual income was lowered to 6.6 percent and then 5.9 percent earlier this year. Next month, the rate will drop to 5.5 percent and then 5.3 percent in 2022. Now, after completing the special session and spending nearly $ 500 million in tax cuts, that number will drop to 4 , 9 percent by 2025.
Governor Hutchinson said;
The bill also provides relief to low-income taxpayers by granting a $ 60 tax credit. This will provide a reduction in state income taxes owed for approximately 28 percent of all Arkansas taxpayers.
With the $ 60 credit, the tax cut also completely eliminates taxes owed by more than 100,000 low-income Arkansans.
As Governor, it is important to me to balance the needs of our state with responsible fiscal policy. We have taken a responsible approach to reducing the state’s income tax burden, while ensuring that the state can still meet its obligations.
The latest national inflation figures were also released on Friday, which now stands at 6.8%, the highest inflation rate in 39 years. Any relief from the state tax burden can literally mean food on the table or gas in the tank.
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