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SB 204

TO EXEMPT FROM GROSS INCOME A GAIN BY A TAXPAYER RESULTING FROM THE ACQUISITION OF PROPERTY UNDER THE RIGHT OF EMINENT DOMAIN OR THE THREAT OF CONDEMNATION.

2025 Regular Session Introduced by Brandon Achor and 105 co-sponsors

Senate Bill 204 exempts gains from property acquired under eminent domain from income tax, easing financial burdens on affected Arkansas taxpayers starting in 2025.

Died in Senate Committee at Sine Die adjournment.
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Bill Summary · SB 204

Summary of Senate Bill 204 (SB 204)

Purpose and Intent

Senate Bill 204 (SB 204) was introduced to amend the Arkansas state income tax laws by providing an exemption from gross income for gains received by taxpayers when their property is acquired under the right of eminent domain or the threat of condemnation. The bill aimed to alleviate the tax burden on individuals and entities whose property is taken involuntarily by governmental or quasi-governmental entities.

Key Provisions

  • Exemption from Gross Income: SB 204 proposed to amend Arkansas Code § 26-51-404(b) to create a new exclusion for gains resulting from the acquisition of real property under eminent domain. This includes:

    • Property taken by state, county, or city entities.
    • Property taken by municipal utilities and other companies with the power of eminent domain.

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

Fiscal Impact

  • Estimated Revenue Reduction: The bill was projected to result in a general revenue reduction of approximately $3.8 million for the fiscal year 2026. This reduction reflects the anticipated decrease in tax revenue due to the new exemption.

Impact on Taxpayers

  • Taxpayers whose property is acquired through eminent domain or under the threat of condemnation would not be required to report gains from such acquisitions as part of their gross income. This change was intended to provide financial relief to affected property owners.

Procedural Aspects

  • Legislative Journey:
    • SB 204 was filed on February 6, 2025, and was referred to the Senate Revenue & Tax Committee.
    • The bill underwent an amendment process, with Amendment #1 adopted on March 12, 2025.
    • Despite these efforts, SB 204 ultimately died in the Senate Committee at Sine Die adjournment on May 5, 2025.

Conclusion

Senate Bill 204 sought to provide significant tax relief for property owners affected by eminent domain actions in Arkansas. Although it garnered support and underwent amendments, it did not progress through the legislative process to become law. The proposed exemption would have had a notable fiscal impact on state revenue and aimed to protect the financial interests of taxpayers facing property acquisition under eminent domain.

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

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