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Bill would reduce income tax liability Tuesday, Dec 12, 2006 By John Lyon Arkansas News Bureau LITTLE ROCK - A Northwest Arkansas state senator pre-filed legislation for 2007 regular session Monday that would reduce state income taxes by 3 percent for all Arkansans for the next two years. Senate Bill 9 by state Sen. Kim Hendren, R-Gravette, would reduce the tax liability of "every person required to file an Arkansas tax return" in tax years 2007 and 2008. The 3-percent reduction would be calculated before the application of any tax credits. Hendren said he wants to "pay back" taxpayers for a 3 percent income tax surcharge that was passed in 2003 to help overcome a state budget shortfall and was repealed two years later. Gov.-elect Mike Beebe has said he favors using the projected budget surplus to phase out the state sales tax on food, and some legislators have filed competing proposals for eliminating the tax. Hendren said he believes the surplus, projected to be $843 million by the end of the fiscal year, would allow for both his proposed tax reduction and a phase-out of the grocery tax, which he said he supports. Under Hendren's bill, if a person is eligible for a tax exemption for living in a border city, the tax reduction would be computed on the amount that would be due if the exemption did not exist. Hendren pre-filed three other bills Monday, including: - SB 6, which would require a drivers to possess a hands-free device in their vehicles when using a cellular phone. -SB 7, which requires drivers to use a hand-free device when using their cellular phone and sets limitations for the use of a cellular phone. - SB 8 which would require haulers to cover loads of gravel. Hendren said SB 6 is the "watered-down" version of a bill he proposed in the last legislative session that made it out of committee but died on the Senate floor. He said SB 7 is the bill he wants to pass, but he also filed SB6 because he believes it has a greater chance of being passed. Rep.-elect Clark Hall, D-Marvell, pre-filed House Bill 1029 which would create a sales tax holiday on the first weekend of every August for school purchases. During that time, retailers would not charge sales taxes on purchases of clothing, school supplies, computers and computer equipment. The tax relief would not apply to items of clothing that cost more than $100 or a single school supply that costs more than $100. It also would not apply to a computers, computer software or computer equipment that costs more than $750. |
