Relating to: resolution of claims against the state for wrongful imprisonment of innocent persons, exempting from taxation certain amounts an individual receives from the claims board or legislature, health benefits and other assistance for wrongfully imprisoned persons, and making an appropriation. (FE)

2025-2026 Regular Session Introduced by Rachael Cabral-Guevara and 5 co-sponsors

SB 577 requires Arkansas to notify local governments 120 days before sales tax expirations, ensuring funding for vital community and economic development projects.

Failed to pass pursuant to Senate Joint Resolution 1

Purpose and Intent

Senate Bill 577 (SB 577) aims to amend existing laws regarding local sales and use taxes in Arkansas. The primary intent of the bill is to ensure that local governments are adequately notified about the expiration of sales and use tax levies, allowing them to take necessary actions to extend these taxes if needed. This is particularly relevant for funding capital improvements and economic development projects.

Key Provisions

Notification Requirement: The Department of Finance and Administration (DFA) is mandated to notify local jurisdictions at least 120 days prior to the expiration of any sales and use tax levied for capital improvements or economic development projects.

Specific Information Provided: The notification must include:

The current expiration date of the sales and use tax.
The specific requirements that local jurisdictions must follow to extend the sales and use tax.

Applicable Taxes: The bill applies to:

Sales and use taxes levied by counties for capital improvements.
Sales and use taxes levied by municipalities for capital improvements.
Sales and use taxes levied for local economic development projects.

Impact

Local Governments: The bill directly affects local governments by ensuring they receive timely notifications about tax expirations, which can help maintain funding for essential projects.

Taxpayers: By facilitating the continuation of local sales and use taxes, the bill aims to prevent disruptions in funding for community projects that rely on these taxes.

Fiscal Impact: The bill is expected to have no significant fiscal impact on the state budget. However, it will require an estimated $104,000 for programming within the Arkansas Integrated Revenue System (AIRS) to implement the notification process.

Procedural Aspects

Legislative Status: SB 577 was introduced on March 31, 2025, and has since passed through various legislative stages, including readings and committee approvals. It was ultimately signed into law as Act 720 on April 18, 2025.

Implementation Timeline: The implementation of the notification process is projected to take six months, during which the DFA may need to send notifications manually until the system is fully operational.

Conclusion

SB 577 represents a proactive approach to managing local sales and use taxes in Arkansas, ensuring that local governments are informed and able to act on tax expirations. This legislative measure is designed to support ongoing funding for critical community projects and economic development initiatives.

Bill

Summary of Senate Bill 577 (SB 577)

Purpose and Intent

Key Provisions

Impact

Procedural Aspects

Conclusion

Create your proposal