Arkansas House Bill HJR1007

Arkansas 2023 Regular Session

• Introduced: 2/8/23
• Refer: 2/8/23
• Failed: 5/1/23

Caption

A Constitutional Amendment To Levy An Excise Tax On Certain Taxable Sales To Reimburse Counties For The Homestead Property Tax Credit And Administer The Application Of The Homestead Property Tax Credit.

Impact

If passed, HJR1007 would modify the Arkansas Constitution to include provisions for this new excise tax. The revenue generated from this tax would be exclusively designated for reimbursing counties for the reduction in tax revenue due to the homestead property tax credit. Furthermore, it aims to streamline the administration of this tax credit, which has been a longstanding mechanism to assist homeowners, thereby supporting local governments that have faced budget constraints due to these credits. This may provide a more stable financial environment for counties reliant on property taxes.

Summary

HJR1007 proposes a constitutional amendment to levy an excise tax of one-half of one percent (0.50%) on certain taxable sales within Arkansas. This tax is intended to reimburse counties for the revenue losses they experience from the homestead property tax credit, as established under Arkansas Constitution, Amendment 79. The proposed tax would apply to sales of tangible personal property, specified digital products, digital codes, and services that are already subject to the state’s gross receipts and compensating taxes. However, essential items like food and used vehicles would be exempt from this tax.

Contention

Discussions surrounding HJR1007 may include debates about the fairness and necessity of introducing a new tax to alleviate the financial pressures on counties. While proponents argue that the tax is vital for local government funding and ensuring equitable tax distribution following the implementation of the homestead credit, opponents may raise concerns about the essence of introducing more taxes on citizens, arguing that it could disproportionately affect lower-income households. Such discussions underscore the delicate balance between maintaining robust local services and managing taxation levels in the state.