HB1947 Arkansas Capital Gains Reduction

Update: Rep. Garner related to ARRA News that he had met 5 times with the Governor's Office and that they have been very open to talk about this. Governor Beebe had indicated that he agrees that the capital gains tax is a barrier to recruiting new businesses to Arkansas. The primary holdup is the projection of tax revenue to be lost as estimated by the Department of Finance and Administration. Garner hopes that business leaders will contact the Gov. and Senate Tax Committee members and will encourage the Governor to sign this bill.
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On Friday, the House passed HB1947, to Create the Arkansas Capital Gains Reduction Act of 2009, with strong bipartisan support (56-14). The bill authored by Rep. Ed Garner (R- Dist 41) is now going to the Senate Committee on Revenue and Tax. This act would eliminate Capital Gains Tax on in-state Arkansas investments made after July 1, 2009 and owned by the taxpayer for more than one year prior to the sale. State finance officials say the state can’t afford the bill’s cut in state revenues -- $42.8 million in fiscal 2011 and $65.9 million in fiscal 2012. However, the state’s estimates don’t take in account the investments businesses would make because of the tax cut.

The other taxes this will generate will more than make up for what Capital Gains Taxes we might lose and this bill has the potential to be the biggest job creating bill of the session as it would eliminate a major barrier to company's locating their headquarters here in Arkansas and provide for more of Arkansan's investment monies to remain in our state. Arkansas has a 4.9% Capital Gains Tax. Tennessee and Texas have no income taxes and therefore no Capital Gains Tax. Oklahoma and Mississippi have eliminated their in-state Capital Gains Taxes. Arkansas Capital Gains Tax is a bad tax which hurts economic development more than sales or income taxes. Arkansas needs to end this to be competitive and allow our other incentives for job growth to have full effect.

Rep, Garner will present the bill to Senate Committee on Revenue and Tax on Monday afternoon or Tuesday. Arkansas citizens need to contact the Governor's office and the Senators who sit on the Revenue and Tax Committee right away to encourage them to adopt this bill:
- Governor Mike Beebe (501) 682-2345 Email info.

Senate Revenue and Tax Committee:

- Sen. Denny Altes 479-646-8981 Email - Sen. John Paul Capps 501-268-8117 Email - Sen. Steve Faris 501-337-7307 No Email - Sen. Bobby Glover 870-552-7150 Email

- Sen. Paul Miller 870-368-7329 No email - Sen. Terry Smith 501-321-0066 Email - Sen. Larry Teague8 70-845-5303 Email - Sen. Sharon Trusty 479-880-9576 Email

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