September 20, 2023
Arkansas lowers personal income and corporate tax rates starting in 2024
On September 15, 2023, Governor Sarah Huckabee Sanders signed into law SB 8, which, effective January 1, 2024, lowers the top personal tax rate from 4.7% to 4.4% and reduces the top corporate tax rate from 5.1% to 4.8% for domestic and foreign corporations.
The law also provides for a non-refundable income tax credit of $150 for individual taxpayers and $300 for married taxpayers for tax year 2023.
Effective January 1, 2024, the supplemental rate of withholding on bonuses and other irregular wage payments is reduced from 4.7% to 4.4%.
Ernst & Young LLP insights
This is the third consecutive year that Arkansas has lowered personal income tax rates. Under SB 549, the top marginal personal income tax rate was lowered from 4.9% to 4.7% retroactive to January 1, 2023. The Arkansas Department of Finance and Administration issued revised income tax withholding instructions effective with wages paid on and after June 1, 2023. (See Tax Alert 2023-1070.)
Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor