By Brian Klaas-USA TODAY SportsArkansas is the latest state to offer tax-free contributions to its $2.6 trillion budget.
The state Legislature approved the tax breaks Friday and the revenue generated from the tax incentives will be distributed to the governor’s office and state treasurer, which will distribute the funds to the state’s two highest-spending counties.
The tax breaks were included in a package passed by the Legislature on Wednesday.
The bill also includes a provision that would allow tax-exempt organizations to receive more than $500,000 in annual tax credits.
The new tax breaks are designed to address the concerns of a number of businesses and individuals in the state, and many have expressed concerns about potential losses if the state does not raise taxes on businesses.
The Legislature also approved a proposal that would eliminate the income tax for some Arkansans who file jointly, a change that could affect the $500 million in income tax revenue the state generates each year.
The measure would eliminate income tax deductions for people who make more than a certain threshold and would eliminate a tax deduction for individuals making more than four times their household income.
Arkansas has one of the lowest state and local taxes in the nation.
The revenue generated by the tax incentive program will help fund Arkansas’ three main education agencies and other education programs.
The program also includes tax breaks for construction projects in the oil and gas industry, the construction of a new hospital and an $8.5 million donation to the University of Arkansas School of Medicine.
Arkansans also would be eligible to receive a tax credit for charitable contributions and a $1,000 credit for the cost of tuition for public universities.
The state will also distribute $3.5 billion in tax credits to other Arkansas counties.
Other tax breaks included in the tax bill include a $500 credit for a first-time homebuyer who buys a home in Arkansas and $1 million for a second homebuyers’ home.
The bill also increases the amount of credit that can be claimed for a tax-preferred mortgage.
The credit is for first- time homebuyners who have not previously taken out a tax loan.