Arkansas Tax Law Amendment Act - House Bill 1162 (2017)

Sep 4, 2026

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House Bill 1162 (2017) amends Arkansas tax statutes to change income and sales-related tax provisions and related tax revenues. It creates an income tax exemption for military retirement and survivor benefits, applies income tax to unemployment compensation benefits, and updates the Arkansas gross receipts tax framework for candy and soft drinks. The bill also imposes full gross receipts and compensating tax on specified digital products and codes, reduces the soft drink tax rate, and adjusts contributions to the Arkansas Medicaid Program Trust Fund to offset decreased deposits.

LanguageEnglish

CategoryLetters

FormatPDF

Pages34

Reading Time12 min

AccessFree to download

Section 1

Revenue allocation changes for the Arkansas Medicaid Program Trust Fund

Section 2

Amendments to the Arkansas Medicaid Program Trust Fund composition

Section 3

Retirement or disability benefits exemption from state income tax

State of Arkansas As Engrossed: H1/24/17 91st General Assembly A Bill Regular Session, 2017 HOUSE BILL 1162 By: Representatives C. Fite, Baltz, Barker, Beck, Brown, Burch, Capp, Cavenaugh, Coleman, Drown, Farrer, K. Ferguson, L. Fite, Fortner, Gazaway, House, Ladyman, Leding, Lowery, McCollum, G. McGill, D. Meeks, Nicks, Pilkington, Rye, B. Smith, Speaks, Wardlaw, J. Williams, Wing, Womack By: Senators J. English, Bledsoe, Files, Hester, J. Hutchinson, D. Wallace, E. Williams, L. Eads, T. Garner, Irvin, B. Johnson, G. Stubblefield, Flippo, J. Hendren For An Act To Be Entitled AN ACT TO AMEND ARKANSAS TAX LAW AND THE USE OF TAX REVENUES; TO CREATE AN INCOME TAX EXEMPTION FOR MILITARY RETIREMENT AND SURVIVOR BENEFITS; TO LEVY INCOME TAX ON UNEMPLOYMENT COMPENSATION BENEFITS; TO AMEND THE DEFINITIONS OF THE ARKANSAS GROSS RECEIPTS TAX ACT OF 1941 TO INCLUDE THE DEFINITION OF CANDY AND SOFT DRINKS; TO IMPOSE THE FULL GROSS RECEIPTS TAX AND COMPENSATING TAX ON THE SALE OF CANDY AND SOFT DRINKS; TO LEVY THE FULL GROSS RECEIPTS TAX ON THE SALE OF SPECIFIED DIGITAL PRODUCTS AND DIGITAL CODES; TO AMEND THE ARKANSAS SOFT DRINK TAX ACT, AS AFFIRMED BY REFERRED ACT 1 OF 1994 , TO REDUCE THE RATE OF TAX; TO SUPPLEMENT THE ARKANSAS MEDICAID PROGRAM TRUST FUND TO OFFSET THE DECREASE IN SOFT DRINK TAX REVENUES DEPOSITED INTO THE FUND; AND FOR OTHER PURPOSES . Subtitle TO AMEND ARKANSAS TAX LAW CONCERNING INCOME TAX, SALES AND USE TAXES, AND THE SOFT DRINK TAX; AND TO SUPPLEMENT THE ARKANSAS MEDICAID PROGRAM TRUST FUND TO OFFSET DECREASED DEPOSITS FROM TAX REVENUES . BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: SECTION 1. Arkansas Code § 19-5-402(a), concerning the maximum allocations of general revenues in a fiscal year, is amended to add an additional subdivision to read as follows: (3)(A) For the fiscal year beginning July 1, 2017, two million nine hundred fifty-four thousand five hundred dollars ($2,954,500) shall be: (i) Included and added to the amount distributed in subdivision (a)(1) of this section; and (ii) Distributed by the Treasurer of State in monthly amounts to the Arkansas Medicaid Program Trust Fund under § 19-5-985. (B) For fiscal years beginning on and after July 1, 2018, five million nine hundred nine thousand dollars ($5,909,000) shall be: (i) Included and added to the amount distributed in subdivision (a)(1) of this section; and (ii) Distributed by the Treasurer of State in monthly amounts to the Arkansas Medicaid Program Trust Fund under § 19-5-985. SECTION 2. Arkansas Code § 19-5-985(b), concerning the Arkansas Medicaid Program Trust Fund, is amended to read as follows: (b)(1) The fund shall consist of the following: (A) All revenues derived from taxes levied on soft drinks sold or offered for sale in Arkansas under the Arkansas Soft Drink Tax Act, § 26-57-901 et seq . , there to be used exclusively for the state match of federal funds participation under the Arkansas Medicaid Program; (B) The additional ambulance annual fees stated in § 20- 13-212; (C) The special revenues specified in §§ 19-6-301(156) and 19-6-301(236); ~~and~~ (D) The amounts collected under §§ 26-57-604 and 26-57-605 above the forecasted level for insurance premium taxes set by the Chief Fiscal Officer of the State under § 10-3-1404(a)(1)(A) ; and (E) The amount provided for in § 19-5-402(a)(3) . (2) If the Arkansas Medicaid Program should be discontinued for any reason, the revenues derived from the soft drink tax levied in the Arkansas Soft Drink Tax Act, § 26-57-901 et seq . , and the funds described in subdivision (b)(1) (E) of this section shall be used exclusively to provide services to Arkansas residents comparable to the services now provided under the Arkansas Medicaid Program . SECTION 3. Arkansas Code § 26-51-307 is amended to read as follows: 26-51-307. Retirement or disability benefits. (a)(1) The first six thousand dollars ($6

FAQs

What major tax changes does House Bill 1162 make?

It creates an income tax exemption for military retirement and survivor benefits, taxes unemployment compensation benefits under income tax, and modifies gross receipts tax provisions for candy and soft drinks and for specified digital products and codes.

How does the bill affect the Arkansas Medicaid Program Trust Fund?

It updates amounts allocated and distributed to the trust fund by fiscal year and amends the trust fund’s revenue sources, including provisions tied to soft drink tax revenues and related payments.

What does Section 3 change about retirement or disability benefits?

It amends Arkansas Code § 26-51-307 to exempt the first $6,000 of certain retirement and disability benefits from state income tax, with eligibility limits for individual retirement account benefits and specific exclusions for other early withdrawals.

Sep 4, 2026

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