H.B. 1361, introduced Monday, would conform to the federal tax exclusions, deductions and adjustments for the Paycheck Protection Program and the Coronavirus Food Assistance Program under the Coronavirus Aid, Relief and Economic Security Act
and the Consolidated Appropriations Act .Under the bill, Arkansas would offer a gross income exclusion for income from forgiven PPP loans and for payments under the food assistance program that aided farmers and ranchers who faced financial difficulties during the spread of COVID-19, the respiratory illness caused by the virus.
The bill would also not permit a tax deduction to be denied or a tax attribute to be reduced as a result of the exclusions for the food assistance program payments.
The bill would also permit the state Department of Finance and Administration to provide exceptions for requirements to file information returns with respect to the gross income exclusions. If enacted, the bill would take immediate effect under an emergency clause and apply for tax years beginning on or after Jan. 1, 2019.
"Arkansas should conform its income tax laws to the federal tax treatment of these loans, payments and expenses to enable Arkansas taxpayers to receive the full benefit of the tax laws so that they can continue to provide jobs for Arkansans and avoid higher rates of unemployment and financial distress," the bill's emergency clause said.
Rep. Les Eaves, R-Searcy, introduced the bill. The legislation is scheduled for a hearing before the House Committee on Revenue and Taxation on Thursday.
--Editing by Neil Cohen.
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