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Bill

SB 1

TO REDUCE THE INCOME TAX RATES FOR INDIVIDUALS, TRUSTS, ESTATES, AND CORPORATIONS.

2026 First Extraordinary Session Introduced by Justin Boyd and 29 co-sponsors

Arkansas SB 1 would reduce income tax rates for individuals, trusts, estates, and corporations to lower overall tax burden and boost economic competitiveness.

Notification that SB1 is now Act 2
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WeVote Research Nonpartisan
Bill Summary · SB 1

Summary of SB 1 (2026 Session, Arkansas)

Title

TO REDUCE THE INCOME TAX RATES FOR INDIVIDUALS, TRUSTS, ESTATES, AND CORPORATIONS.

Purpose and Intent

  • The bill aims to reduce Arkansas income tax rates across multiple taxpayer categories: individuals, trusts, estates, and corporations.
  • The overarching goal is to lower the tax burden on residents and businesses, potentially stimulating economic activity and personal disposable income.

Key Provisions (as indicated by the title and standard tax-rate reduction framework)

  • Reduce marginal income tax rates for:
    • Individuals
    • Trusts
    • Estates
    • Corporations
  • Likely adjustments may include:
    • Lowering top marginal rates or compressing tax brackets
    • Reducing tax liability for various income levels
    • Possible updates to surcharge rules, exemptions, or standard deduction/credits that interact with rate changes
  • The bill is framed as a broad, across-the-board rate reduction rather than targeted tax credits or narrowly tailored relief.

Note: The available information specifies the overall goal (rate reductions) but does not provide line-by-line text or specific percentage points, bracket thresholds, or associated fiscal offsets.

Who Would Be Affected

  • Individual Arkansans paying personal income tax
  • Fiduciaries and beneficiaries of trusts and estates
  • Taxable estates filing returns
  • Corporations subject to Arkansas corporate income tax

Impacts could include:
- Lower annual tax bills for residents across income levels
- Reduced tax liability for trust/estate distributions to beneficiaries (depending on how rates interact with distributions)
- A more favorable tax environment for businesses, potentially affecting investment, hiring, and competitiveness

Procedural and Timeline Details

  • Action History:
    • Filed: April 30, 2026
    • Read first time, rules suspended, read second time, referred to the Senate Revenue & Tax Committee on May 4, 2026
    • Returned by the Committee with a recommendation to Do Pass on May 4, 2026
  • Sponsorship:
    • Primary and numerous co-sponsors listed (a broad consensus among Senate members), indicating strong legislative support
  • Next steps (typical for a bill of this nature):
    • Committee vote and potential amendments in the Senate Revenue & Tax Committee
    • Floor debate and vote in the Senate
    • If passed, transmission to the House for consideration
    • Potential conference committees or amendments if the House and Senate differ
    • Final passage and governor's action

Fiscal and Economic Considerations (Implications to monitor)

  • Revenue impact: Rate reductions generally reduce state tax revenue in the near term; the bill may include or be paired with offsets or adjustments to maintain budget balance.
  • Economic impact: Potential increases in disposable income for residents and improved after-tax profitability for businesses; effects on investment, consumer spending, and job creation could be evaluated in subsequent fiscal notes.
  • Equity and receipts: Assess how reductions affect different income groups and whether the tax base is preserved or broadened through other mechanisms.

Summary

SB 1 seeks to reduce Arkansas income tax rates for individuals, trusts, estates, and corporations, signaling a broad tax relief package intended to lower the overall tax burden and enhance economic competitiveness. The bill progressed from filing to committee referral with a Do Pass recommendation in May 2026 and carries the support of a wide slate of sponsors. Detailed bracket-by-bracket provisions, effective dates, and fiscal offsets are not provided in the available information and would be essential for a complete assessment.

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

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