LITTLE ROCK, Ark.–A sales tax exemption for federally chartered credit unions in Arkansas has been removed from the Arkansas Tax Reform exemption list assembled by the state’s Tax Reform and Relief Legislative Task Force.
According to the Cornerstone Credit Union League, the committee is currently reviewing exemptions to find ways to increase state funding during the 2019 legislative session.
In advance of the meeting, Ron Harrod of the Arkansas Credit Union Association (one of three state leagues that comprise the CCUL) included in the committee members' packets copies of the NCUA Letter of Exemption, Explanations of the Tax Exemption Letter, and a memo to the task force regarding the federal credit union tax exemption that had been prepared by Suzanne Yashewski, SVP-regulatory compliance counsel for Cornerstone Credit Union League.
The CCUL said the Task Force decided to consider raising the state sales tax on groceries. Currently, groceries are at a reduced rate of 1.5% in Arkansas, as compared to the standard sales tax rate is 6.5%. The grocery sales tax is expected to drop to .125 percent on Jan. 1, 2019.
The league reported that Arkansas Gov. Asa Hutchinson wants to cut the state’s top individual income tax rate and create an income tax credit for low-income and moderate-income persons during the next legislative session.
The Task Force's final report is due on or before Sept. 1, 2018.