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Arkansas Tax Reform and Tax Relief Task Force Committee Update
Friday, November 10, 2017 6:50 AM

The Arkansas Tax Reform and Relief Task Force created by Act 78 and Act 79 during this year’s 91st General Assembly regular session will focus on tax relief and a tax overhaul, according to Co-chair Sen. Jim Hendren. That review of state spending is the Joint Budget Committee and the whole legislative body's responsibility.

The budget for the Arkansas Tax Reform and Relief Legislative Task Force tripled from $50,000 to $150,000 at the Arkansas Legislative Council Oct. 20, 2017, meeting. This budget pays for per diem and mileage to lawmakers attending meetings of the tax force. It will also cover the expenses of members not on the task force. The increase is for fiscal 2018, which started July 1.

Legislative members' annual salary is $40,188, except for the House speaker and the Senate president pro tempore. Their annual salary is $45,900 per year. Lawmakers who live more than 50 miles from the State Capitol saw their per diem rate increased on Oct. 1, from $153 to $155. Those lawmakers who live within 50 miles of the State Capitol have a per diem rate of $59. The mileage rate is 53.5 cents per mile if they live over 50 miles from the State Capitol.

Since May, lawmakers have already been paid about $30,000 in per diem and mileage for attending the 16-member Tax Task Force meetings. The increase covers all lawmakers that wish to attend.

PFM Group Consulting has been hired to assist the committee with research under a contract of up to $312,750 through Dec. 31, 2018, with an option to renew for another six months. The Task Force is required to issue a final report by Sept. 1, 2018, which will be before the next regular legislative session.

During the Tax Task Force Committee meetings Nov. 7-8, their consulting firm presented information on excise taxes, according to Ron Harrod, Arkansas Credit Union Association lobbyist.

Excise taxes apply to specific goods or activities, such as gasoline, tobacco, alcohol, or gambling. Additional examples include excise taxes in insurance premiums, hotel/motel stays, rental cares, sugared beverages, marijuana, and amusement admissions. Still other examples include billboard advertisements, bingo games, boat rentals, cell phones, coin-operated laundromats, dry-cleaning solvents, egg containers, electric vehicles, fireworks, fish feed, grocery bags, mobile homes, personal property rental, snack food, tire sales, tire disposal, trading stamp, etc.

Excise taxes are made a part of the price and are not disclosed at the point of sale, as sales tax is added at the point of sale. Arkansas’ excise taxes accounts for 13.5 percent of the total tax revenue compared to 16.2 percent of all state tax collections nationally.

The committee seemed to have taken another path as they asked the consulting group to compare taxes to the cost of their intended purpose. 

For more information, please contact Ron Harrod at rharrod@sbcglobal.net or call 501-944-3068.