Arkansas 2025 Regular Session

Arkansas Senate Bill SB412 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		Stricken language would be deleted from and underlined language would be added to present law.
2		-	Act 614 of the Regular Session
3	2		JLL093 03/10/2025 7:49:54 AM JLL093
4	3		State of Arkansas 1
5	4		95th General Assembly A Bill 2
6	5		Regular Session, 2025 SENATE BILL 412 3
7	6		4
8	7		By: Senator J. Boyd 5
9	8		By: Representative McClure 6
10	9		7
11	10		For An Act To Be Entitled 8
12	11		AN ACT TO AMEND THE INCOME TAX DEDUCTIONS FOR MOVING 9
13	12		AND TRAVEL EXPENSES; TO AUTHORIZE THE DEPARTMENT OF 10
14	13		FINANCE AND ADMINISTRATION TO SET THE PER -MILE AMOUNT 11
15	14		FOR THE INCOME TAX DEDUCTION FOR TRAVEL AND 12
16	15		TRANSPORTATION EXPENSES BY PROCLAMATION; AND FOR 13
17	16		OTHER PURPOSES. 14
18	17		15
19	18		16
20	19		Subtitle 17
21	20		TO AUTHORIZE THE DEPARTMENT OF FINANCE 18
22	21		AND ADMINISTRATION TO SET THE PER -MILE 19
23	22		AMOUNT FOR THE INCOME TAX DEDUCTION FOR 20
24	23		TRAVEL AND TRANSPORTATION EXPENSES BY 21
25	24		PROCLAMATION. 22
26	25		23
27	26		BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 24
28	27		25
29	28		SECTION 1. Arkansas Code § 10-3-309(b)(1)(B), concerning the items not 26
30	29		included in the definition of "rule" as used in relation to the legislative 27
31	30		review and approval of state agency rules, is amended to add an additional 28
32	31		subdivision to read as follows: 29
33	32		(vi) A proclamation issued by the Secretary of the 30
34	33		Department of Finance and Administration under § 26 -51-423(a)(2). 31
35	34		32
36	35		SECTION 2. Arkansas Code § 25 -15-202(9)(B), concerning the items not 33
37	36		included in the definition of "rule" under the Arkansas Administrative 34
38	37		Procedure Act, is amended to add an additional subdivision to read as 35
39	38		follows: 36 SB412
40	39
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42	41		(ix) A proclamation issued by the Secretary of the 1
43	42		Department of Finance and Administration under § 26 -51-423(a)(2). 2
44	43		3
45	44		SECTION 3. Arkansas Code § 26 -51-403(b)(8), concerning deductions from 4
46	45		gross income, is amended to read as follows: 5
47	46		(8) Deductions for moving expenses, as set forth in § 26-51-6
48	47		423(a)(4) 26-51-423(a)(1)(C); 7
49	48		8
50	49		SECTION 4. Arkansas Code § 26 -51-423(a), concerning income tax 9
51	50		deductions for expenses, is amended to read as follows: 10
52	51		(a)(1) In computing net income, there shall be allowed as deductions 11
53	52		the following expenses: 12
54	53		(1)(A) Business Expenses. All of 26 U.S.C. § 162, except 13
55	54		subsection (n), as in effect on January 1, 2019, regarding trade or business 14
56	55		expenses, is adopted for the purpose of computing Arkansas income tax 15
57	56		liability; 16
58	57		(2)(B) Medical and Dental Expenses. Title 26 U.S.C. § 17
59	58		213, as in effect on January 1, 2011, is adopted in computing the medical and 18
60	59		dental expense deduction under the state income tax law; and 19
61	60		(3) Travel Expenses. In determining travel expenses deductible 20
62	61		as a business expense in computing net income as provided under subdivision 21
63	62		(a)(1) of this section, the deduction for vehicle miles shall be determined 22
64	63		by the Secretary of the Department of Finance and Administration under his or 23
65	64		her regulatory authority in § 26 -18-301; and 24
66	65		(4)(C) Moving Expenses. Title 26 U.S.C. § 217, as in 25
67	66		effect on January 1, 2011, regarding the deduction of moving expenses, is 26
68	67		adopted for the purpose of computing Arkansas income tax liability. 27
69	68		(2)(A) In determining travel and transportation expenses 28
70	69		deductible under this subsection in computing net income, the amount of the 29
71	70		per-mile deduction for vehicle miles shall be determined by proclamation of 30
72	71		the Secretary of the Department of Finance and Administration. 31
73	72		(B) The amount of the per -mile deduction allowed under 32
74	73		this subsection shall not exceed one dollar ($1.00) per mile. 33
75	74		(C) The secretary shall: 34
76	75		(i) Set the amount of the per -mile deduction allowed 35
77	76		under this subsection as close to the amount of the per -mile deduction for 36 SB412
78	77
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80	79		vehicle miles most recently established by the Internal Revenue Service as is 1
81	80		fiscally responsible without causing an undue hardship on taxpayers; and 2
82	81		(ii) Issue a proclamation under subdivision 3
83	82		(a)(2)(A) of this section no later than thirty (30) days after the per -mile 4
84	83		deduction for vehicle miles established by the Internal Revenue Service is 5
85	84		changed. 6
86	85		7
87	86		SECTION 5. Arkansas Code § 26 -51-423(c)(3), concerning income tax 8
88	87		deductions for expenses for a self -employed taxpayer, is amended to read as 9
89	88		follows: 10
90	89		(3) Any amount paid by the taxpayer for insurance to which this 11
91	90		subsection applies shall not be taken into account in computing the amount 12
92	91		allowable to the taxpayer as a deduction under subdivision (a)(2) (a)(1)(B) 13
93	92		of this section. 14
94	93		15
95	94		SECTION 6. Arkansas Code § 26 -51-423(g)(1), concerning income tax 16
96	95		deductions for expenses, is amended to read as follows: 17
97	96		(g)(1) A deduction pursuant to subdivision (a)(1) (A) of this section 18
98	97		for interest or intangible -related expenses paid by the taxpayer to a related 19
99	98		party shall be allowed only if: 20
100	99		(A) The interest or intangible -related income received by 21
101	100		the related party is subject to income tax imposed by the State of Arkansas, 22
102	101		another state, or a foreign government that has entered into a comprehensive 23
103	102		income tax treaty with the United States; 24
104	103		(B) The interest or intangible -related income received by 25
105	104		the related party was received pursuant to: 26
106	105		(i) An “arm's length” contract or at an “arm's 27
107	106		length” rate of interest; and 28
108	107		(ii) A transaction not intended to avoid the payment 29
109	108		of Arkansas income tax otherwise due; 30
110	109		(C) The taxpayer and the secretary enter into a written 31
111	110		agreement prior to the due date of the taxpayer's Arkansas income tax return: 32
112	111		(i) Authorizing the taxpayer to take the deduction 33
113	112		for the tax year at issue; or 34
114	113		(ii) Requiring the use of an alternative method of 35
115	114		income apportionment by the taxpayer for the tax year at issue; or 36 SB412
116	115
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118	117		(D) During the taxable year, the related party recipient 1
119	118		of interest or intangible -related income, in a location not described in 2
120	119		subdivision (g)(1)(A) of this section, a “non -tax location”: 3
121	120		(i) Operates an active trade or business in the non -4
122	121		tax location; 5
123	122		(ii) Has a minimum of fifty (50) full -time-6
124	123		equivalent employees in the non -tax location; 7
125	124		(iii) Owns real or tangible personal property with a 8
126	125		fair market value in excess of one million dollars ($1,000,000) located in 9
127	126		the non-tax location; and 10
128	127		(iv) Has revenues generated from sources within the 11
129	128		non-tax location in excess of one million dollars ($1,000,000). 12
130	129		13
131	130		SECTION 7. Arkansas Code § 26 -51-437(b)(1) and (2), concerning the 14
132	131		itemized deductions not included in the definition of "miscellaneous itemized 15
133	132		deductions", are amended to read as follows: 16
134	133		(1) The deduction allowed under § 26 -51-423(a)(1)(A) relating to 17
135	134		expenses in carrying on a trade or business. However, employee business 18
136	135		expenses which are not reimbursed by the employer are miscellaneous itemized 19
137	136		deductions; 20
138	137		(2) The deduction allowed under § 26-51-423(a)(2) 26-51-21
139	138		423(a)(1)(B) relating to medical, dental, drug, and related healthcare 22
140	139		expenses; 23
141	140		24
142	141		25
143		-	~~APPROVED: 4/14/25~~ 26
	142	+	26
144	143		27
145	144		28
146	145		29
147	146		30
148	147		31
149	148		32
150	149		33
151	150		34
152	151		35
153	152		36