LITTLE ROCK, Ark. (AP) -- Manufacturers would pay lower taxes under a plan endorsed by an Arkansas House committee on Tuesday, but legislative leaders have yet to agree on whether those or other proposed tax cuts will be included in their plan to slash $100 million in taxes.
The legislation calls for reducing the sales and use taxes on natural gas and electricity used by manufacturers. State finance officials estimate that change would decrease state revenue by about $14 million next year and roughly $25 million in subsequent years.
Rep. Charlie Collins, chairman of the House Revenue and Tax Committee, which approved the plan, noted that the legislation is among many tax-cutting plans being considered by lawmakers. He said that while legislative leaders seem to agree on some of the large tax cuts — such as cutting the state income tax — they were still deciding which tax cuts would make up their final tax-cutting plan.
"My sense is that the bigger things that are going to eat up the greater portion of that 100 million plus, there's some good alignment around," said Collins, R-Fayetteville. "But a lot of the smaller pieces of that money are still in flux."
Cutting state income taxes is expected to be a centerpiece of the package. The measure, which would cost the state about $57 million a year, would lower the top income tax rate from 7 percent to 6.875 percent and increase the minimum income it applies to from $34,000 to $44,000. The House is scheduled to vote on that proposal later this week, Collins said.
House Speaker Davy Carter is also pushing for a bill that would reduce capital gains taxes. That proposal, which the House Revenue and Tax Committee approved last week, would cost the state $3.1 million next year, according to state finance officials.
The House panel on Tuesday also tabled a proposal that would have given income tax credits to people who install solar energy systems in their home.