A message from DBH Management Consultants
"We wanted to share an overview of the most relevant tax and incentive policy developments that could impact your business or organization. The 2025 Regular Session of the Arkansas General Assembly concluded on May 5th, which resulted in over 70 tax related measures.
Key Changes Include:
1. Economic Development Reforms - As part of the IMPACT initiative, Improving Markets, Promoting Arkansas Commerce and Trade, the legislature enacted Act 881 and Act 882, which revise existing incentive programs. In addition, a proposed constitutional amendment was approved for the 2025 ballot to allow for the establishment of economic development districts statewide.
2. Shift in Income Tax Apportionment - Act 719 introduces market-based sourcing for corporate income taxes, changing how Arkansas determines taxable income for companies operating in multiple states. This change takes effect for tax years beginning in 2026 and may alter your company's tax liability depending on how and where you operate.
3. Homestead Credit Increase - Homeowners will see a modest relief through Act 330, which will increase the homestead property tax credit by $100.
Looking forward, the legislature is unlikely to pursue additional tax reductions until the 2026 fiscal session. However, the possibility of a special session remains on the table, particularly to consider adjustments prompted by the recent passage of the federal "Big Beautiful" tax law.
Please don't hesitate to reach out if you'd like to discuss any specific legislation in more detail.
To read a full analysis: KUTAKROCK & Wright Lindsey Jennings
Credit to: KutakRock & Wright Lindsey Jennings for their detailed legislative analysis
Warm Regards,
DBH Team"
