With passage of SB1 in the General Assembly’s third special session, Arkansas last week became the 13th state to authorize an individual income tax rate reduction this year. This round of Arkansas income tax cuts effectively accelerated reforms policymakers enacted eight months ago.
The December 2021 changes set the state on course to lower its top individual and corporate income tax rates from 5.9 percent and 6.2 percent, respectively, to 4.9 percent and 5.3 percent as early as 2025. However, the state’s $1.6 billion surplus in fiscal year 2022 made it possible to advance the timeline by three years for the individual tax and two years for the corporate income tax.
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