Summary of Tax Cuts

Summary of Tax Cuts

Since 2015, the Hutchinson Administration has led the effort to pass legislation providing a total of $680 million of historic income tax relief to all Arkansans. 

2022: Top Individual Tax Rate at 4.9%

In August 2022, Governor Hutchinson signed legislation to immediately lower the individual tax rate to 4.9%.

  • Takes over $400 million from the state coffers and returns it to the pockets of hardworking Arkansans.
  • House bill 1002 and Senate bill 1 makes the income tax rate the lowest in state history.
  • The legislation accelerates tax cuts that were signed into law in December 2021. 
  • Provides additional financial relief for low- and middle-income taxpayers with a $150 nonrefundable tax credit.

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2021: Largest Tax Cut in Arkansas History

In December 2021, Governor Hutchinson signed the largest tax cut in Arkansas History during the Second Extraordinary Session of the 93rd General Assembly.

  • Total tax cut savings: $431,000,000
  • Lowers the top individual tax rate to 5.5% in January 2022, then to 5.3% in January 2023, and eventually 4.9% in 2025.
  • Lower-income taxpayers will receive a $60 tax credit
  • Combines low- and middle-income tax tables.

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2019: The 5.9 Tax Plan

In 2019, the Governor signed legislation that reduces the top marginal tax rate from 6.9% to 5.9%.

  • Phase one went into effect on January 1, 2020.
  • It will be phased in over two years.
  • This tax cut is the third phase of Governor Hutchinson’s three-part plan to reform Arkansas’s tax code.
  • All Arkansans have received a tax cut since legislation was first signed in 2015.

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2017: $50 Million Cut
And $13 Million Retired Military Tax Cut

In 2017, Governor Hutchinson signed the second largest cut to the income tax rate in Arkansas history—$50M. This cut targeted low income Arkansans.  

  • Removed approximately 120,000 taxpayers from the rolls.

The Governor also signed legislation eliminating the income tax on military retirement pay, known as the Retired Military Tax Cut.

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2015: $102 Million Cut

In 2015, Governor Hutchinson fulfilled his top campaign promise by signing the Middle Class Income Tax Cut of $102M.

  • This tax cut returned as much as $540 annually to nearly 500,000 taxpayers.

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