Senator Withdraws Push to Eliminate Income Tax, Moves Proposal to Study

Senator Garner withdrew his bill to eliminate Arkansas’s individual income tax and asked that the measure be sent to an interim study rather than advance this session. Garner framed the goal as a long‑term priority to make Arkansas more competitive, but said the short‑term budgetary consequences would be severe.

"If you pass this bill today, it probably put a severe strain on our budget moving forward and be able to operate for the next year of government," Garner told the committee, acknowledging the fiscal tradeoffs of his proposal. He said the idea was intended to start a longer conversation about gradual reductions rather than an immediate cut.

Paul Gehring of the Department of Finance and Administration told the committee the revenue effect of a comparable proposal would be substantial: an FY22 estimate of about $1.5 billion and a full‑year FY23 impact of roughly $3.0 billion. Gehring answered follow‑up questions about exemptions and said DFA could provide prior documents outlining various exemptions and their impacts.

Committee members pressed on feasibility and transition mechanisms. Several senators urged study and phased approaches; others noted the need to examine offsets such as altering exemptions or restructuring local tax streams before attempting a major tax shift.

After discussion, Garner said he would withdraw the bill "not to put anybody in a bad position" and would move it to ISP (Interim Study Proposal) for further analysis and development.

The committee took no substantive vote on the proposal and did not advance it out of committee; the item will be studied further under the sponsor’s proposal.