This year the Arkansas General Assembly increased some taxes and imposed some new taxes including:
- Increased sales tax on soft drinks and candy
- Income tax on unemployment benefits
- New sales tax on digital downloads (such as the purchase of software, digital music, and movies
- Doubling the special tax on new tires from $1.00 to $2.00 (called a fee)
- Adding a new special tax of $1.00 every time you have a used tire mounted on a rim (called a fee)
But things began looking up when the Arkansas House of Representatives said “NO” to state’s insatiable appetite for more tax money by refusing to pass two major taxes. The House of Representatives voted down:
- Internet Sales Tax – The sponsor of SB140 (internet sales tax) estimates the tax would raise at least $100 million a year from Arkansas taxpayers. The bill proposed to tax your internet purchases from out-of-state sellers who have no presence in Arkansas. Senate vote. House vote.
- Gas Tax –HB1726 would have taken about $200 million from taxpayers. It would have imposed the 6.5% state sales tax on the wholesale price of gasoline and diesel and used it for bonds for highways. The increase on wholesale gas would also be reflected in an increase in price at the gas pump. The highway bonds would have had to be approved by the voters, but the ballot would not have said anything about the vote triggering the tax. House Vote.
But just when you thought you were safe from more taxes, Governor Asa Hutchinson let the state know he still wants these taxes.
Internet Sales Tax – Governor Asa Hutchinson supports the internet sales tax and said: “This will be resolved. It is just a matter of time,” he said. “I had a number of legislators that came up to me and said they want to continue to work on that, so we’ll see when that can be addressed in a future legislative session.”[i] The Governor has not been shy about calling special sessions of the legislature.
Gas Tax – Governor Hutchinson is not giving up on the Gas Tax either. “As to the long-term solutions, it emphasizes that it is difficult to get a referral of this General Assembly out to the voters, and that I hope the leadership of our state and the business community and others will look at an initiated act that might go on the ballot for a highway program,” he said. “Otherwise, we’ll continue to debate the long-term solution in future sessions.”[ii] (emphasis added)
What is the message? “I’LL BE BACK.”