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SB 558

GAMING-TECH

104th Regular Session Introduced by Don Harmon

Senate Bill 558 required Arkansas corporations to file income tax returns electronically, aiming to streamline processes and reduce costs for businesses filing multiple returns.

Rule 3-9(a) / Re-referred to Assignments
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Bill Summary · SB 558

Summary of Senate Bill 558 (SB 558)

Purpose and Intent

Senate Bill 558 (SB 558) aimed to mandate the electronic filing of certain corporate income tax returns in the state of Arkansas. The bill was introduced on March 24, 2025, by Senator Crowell and Representative Hollowell, with the intent to streamline the tax filing process for corporations and reduce the administrative burden associated with paper filings.

Key Provisions

  • Electronic Filing Requirement:

    • Corporations required to file their income tax returns electronically with the Internal Revenue Service (IRS) under 26 C.F.R. § 301.6011-5 must also file their Arkansas corporate income tax returns electronically.
    • This requirement extends to corporations that are part of an affiliated group with a federal parent corporation that meets the electronic filing threshold.

  • Waiver Provision:

    • The Secretary of the Department of Finance and Administration (DFA) has the authority to waive the electronic filing requirement if it is determined that electronic filing would impose an undue hardship on the taxpayer.

  • Effective Date:

    • The provisions of the bill were set to take effect for tax years beginning on or after January 1, 2025.

Impact

  • Affected Entities:

    • The bill would primarily impact corporations that file ten or more returns annually, as well as those in affiliated groups with a federal parent corporation required to file electronically.

  • Taxpayer Considerations:

    • Corporations may need to invest in updated tax software or engage third-party tax preparation services capable of electronic filing.

  • Administrative Efficiency:

    • Currently, Arkansas does not have an electronic filing requirement for corporate income tax returns, leading to a significant number of paper filings. The bill aimed to address inefficiencies, as approximately 90% of corporate income tax returns are filed electronically nationwide, but only 70-75% of consolidated returns in Arkansas are filed electronically.

  • Cost and Labor Savings:

    • The manual processing of paper returns incurs an estimated cost of $16,000 annually and requires about 600 hours of labor. Transitioning to electronic filing is expected to reduce these costs and streamline processing.

Procedural Aspects

  • Legislative Journey:
    • The bill was read for the first time on March 31, 2025, and subsequently referred to the Revenue & Tax Committee in the Senate. However, it ultimately died in the Senate Committee at Sine Die adjournment on May 5, 2025.

Conclusion

While SB 558 sought to modernize the corporate income tax filing process in Arkansas by requiring electronic submissions, it did not advance through the legislative process. The proposed changes highlighted the need for efficiency in tax administration and aimed to align Arkansas with the practices of surrounding states that have already implemented similar electronic filing requirements.

Compiled from official sources — confirm details with the bill’s official record.

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