The National Federation of Independent Business (NFIB) in Arkansas has expressed approval for Governor Sarah Huckabee Sanders’ initiative to reduce the state’s income tax. NFIB State Director Katie Burns commended the proposal, emphasizing its potential benefits for small businesses.
“Our small businesses face a myriad of challenges, from rising prices to the worker shortage,” Burns stated. “Cutting taxes for hardworking Arkansans will direct dollars back to business owners instead of sitting in government coffers waiting to be spent on more government programs. This plan will go back into the bottom line of small business owners so they can continue to keep Main Street communities across Arkansas alive by growing and creating jobs. We look forward to working with our new Governor, her team, and the General Assembly to make these tax cuts a reality.”
The proposed tax cuts are particularly significant for many small businesses in Arkansas organized as pass-through entities like LLCs and partnerships, where taxes are paid at the individual rate.
Governor Sanders’ proposal affects over 1.1 million taxpayers earning more than $24,300 annually. The plan includes $100 million in personal income tax cuts and $20 million in corporate tax reductions. The individual top rate is set to decrease from 4.9% to 4.7%, while corporations based in Arkansas or elsewhere will see their rate drop from 5.3% to 5.1%. These changes are retroactive from January 1, 2023.
The legislative measure backing this initiative is Senate Bill SB 549, introduced by Senator Jonathan Dismang (R-Beebe) and Representative Les Eaves (R-Searcy).
