AR
Arkansas House Bill HB1538

Arkansas 2025 Regular Session

Arkansas House Bill HB1538

Introduced
2/20/25  
Refer
2/20/25  

Caption

To Amend The Law Concerning The Net Operating Loss Income Tax Deduction; And To Increase The Carry-forward Period For The Net Operating Loss Income Tax Deduction.

Impact

The proposed amendments come in response to a growing recognition of the need for tax code modernization in Arkansas. Currently, Arkansas has a more limited carry-forward provision compared to many other states and the federal standard, which could be detrimental to the state's competitiveness. By extending this timeframe, the bill aligns Arkansas with broader tax strategies that support business longevity and stability by mitigating the financial impact of economic fluctuations. This, in turn, could lead to job creation and stimulate economic development within the state.

Summary

House Bill 1538 proposes amendments to Arkansas laws concerning the net operating loss (NOL) income tax deduction. The bill aims to increase the carry-forward period for such deductions, extending it from the current ten years to a maximum of twenty years. This change is anticipated to benefit businesses, particularly those that experience cyclical income or are susceptible to downturns, by allowing them a longer period to utilize their deductions and thereby reduce their tax liabilities. This is especially crucial for start-ups and expanding businesses, fostering a more favorable environment for growth and investment in the state.

Contention

While proponents of HB 1538 argue that it would create a more equitable tax landscape and support businesses, there may also be concerns regarding the potential fiscal impact on state revenue. Critics may argue that extending the carry-forward period could lead to reduced tax income in the short term, affecting funding for public services. The bill highlights a key tension between fostering a business-friendly environment and ensuring adequate state revenue for essential services. Therefore, it may influence broader discussions on tax policy and economic management in Arkansas.

Companion Bills

No companion bills found.

Previously Filed As

AR HB1012

To Amend The Standard Deduction For Income Tax Purposes; And To Increase The Standard Deduction.

AR HB1345

To Amend The Income Tax Deduction For A Teacher's Classroom Expenses; And To Increase The Income Tax Deduction For A Teacher's Classroom Expenses.

AR HB1044

To Adopt Federal Law Concerning Income Tax Deductions For Depreciation And The Expensing Of Property.

AR SB38

To Amend The Income Tax Provisions Concerning The Apportionment Of Business Income; And To Repeal The Throwback Rule.

AR HB1779

To Amend The Wood Energy Products And Forest Maintenance Income Tax Credit; And To Allow An Income Tax Credit For Wood Energy Products And Forest Maintenance Expansion Projects.

AR SB482

To Amend The Income Tax Act Of 1929; And To Provide An Apportionment Formula For The Income Of Railroads.

AR HB1492

To Amend The Income Tax Credit For Apprenticeship Programs; And To Increase The Income Tax Credit Allowed For Apprenticeship Programs.

AR SB8

To Reduce The Income Tax Rates Applicable To Individuals, Trusts, Estates, And Corporations; To Create An Inflationary Relief Income Tax Credit For Certain Taxpayers; And To Declare An Emergency.

AR SB549

To Reduce The Income Tax Rates Applicable To Individuals, Trusts, Estates, And Corporations.

AR HB1680

To Create The Arkansas Private Lands Conservation Income Tax Credit Act.

Similar Bills

No similar bills found.