Rep. Carter Delays Sales Tax Review
House Speaker Robert Moore (D, Arkansas City), at the start of the current 88th General Assembly’s Fiscal Session, made it clear he was not interested in discussing anything other than budget matters during this session, causing Rep. Davy Carter (R, Cabot) to delay his plan to find a “revenue-neutral” way to lower individual income tax brackets in the state. The Department of Finance & Administration estimates that 121 exemptions and exclusions to the sales and use tax equal more than $1.2 billion each year.
Carter, whose House Revenue & Tax Committee championed several successful tax cuts during the 2011 general session, earlier had planned hearings in February to review sales tax exemptions. In light of Moore’s request Carter’s committee will instead just work on procedures and goals / scope for the hearings and review (which will now take place after the session).
“A working class family with an annual income in the low $30,000 range is in the highest marginal tax bracket in Arkansas, even though that family’s income exceeds the federal poverty level by only $10,000 or so,” Carter said. “This needs to be addressed along with other tax ‘loopholes’ and how competitive we are with our surrounding states. Essentially, I’d like to see a broader base with lower rates across the board.”
Carter wants the Legislature to review the exemptions in light of what makes sense. “To that end,” Carter said, “I would like to see … a ‘show cause’ notice to supporters of these exemptions to require compelling evidence for their continuance.”