Arkansas House and Senate Approve Income Tax Cut Bills on Party-Line Votes in Special Session

Overview

• Both chambers passed their versions on party-line votes, with the Senate voting 29-6 and the House 79-17, and the bills now swap chambers for final approval before heading to Gov. Sarah Huckabee Sanders.
• The plan lowers the top individual income tax rate from 3.9% to 3.7% retroactive to January 1, 2026, and cuts the corporate rate from 4.3% to 4.1% starting January 1, 2027.
• State budget officials project the cuts would reduce revenue by just over $190 million in the next fiscal year and by just under $145 million the following year.
• Republican sponsors say Arkansas continues to run surpluses and that lower rates help competitiveness, while Democrats and advocates argue the cuts would weaken funding for schools, hospitals, and basic needs.
• Opponents pointed to trade-offs such as extending postpartum Medicaid coverage, shoring up rural hospitals, and improving food access, and they criticized expanding school vouchers projected at over $300 million as Republicans pursue a longer-term goal of phasing out the income tax.