StrickenHall languageof wouldthe beHouse deletedof fromRepresentatives and95th underlinedGeneralAssembly language- wouldRegular beSession, added2025 toAmendment presentForm law.______________________________________________________________________ Subtitle of House Bill 1065 TO CREATE THE INFLATION REDUCTIONACT OF 2025.

State______________________________________________________________________ ofAmendment ArkansasNo. As Engrossed:

H2/19/251 95thto GeneralHouse Assembly A Bill Regular1065 Session,Amend 2025House HOUSEBill BILL 1065 5as By:originally introduced:

RepresentativesAdd Ray,Representatives Achor, Andrews, Barker, Beaty Jr., Beck, Bentley, S.

Scott Richardson, Richmond, Rose, Rye, Schulz, Torres, Underwood, Unger, Wing, Wooten *.JLL223* TheAmendment was read ________________________________________________________________________________ By:

SenatorRepresentative J.Ray JLL/JLL - 02-17-2025 03:54:38 _________________________ JLL223 Chief Clerk

Dismang For An Act To Be Entitled AN ACT TO CREATE THE INFLATION REDUCTION ACT OF 2025;

TO AMEND THE STATE INCOME TAX LAWS;

TO REMOVE THE CAP ON INCREASES TO THE STANDARD DEDUCTION AND INDIVIDUAL INCOME TAX TABLES DUE TO INFLATION;

TO TIE INCREASES OF THE STANDARD DEDUCTION AND INDIVIDUAL INCOME TAX TABLES TO A REGIONAL INDEX OF THE CONSUMER PRICE INDEX;

FOR OTHER PURPOSES.

Subtitle TO CREATE THE INFLATION REDUCTION ACT OF 2025.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:

SECTION 1.

DO NOT CODIFY.

Title.

This act shall be known and may be cited as the "Inflation Reduction Act of 2025." SECTION 2.

Arkansas Code § 26-51-201(d)(2), concerning the method of annually adjusting the tables that determine the amount of individual income tax due, is amended to read as follows:

(2) For purposes of subdivision (d)(1) of this section, the cost-of-living adjustment for a calendar year is the percentage, if any, by *JLL075* 02-19-2025 11:01:44 JLL075 As Engrossed:

H2/19/25 HB1065 which the CPI for the current calendar year exceeds the CPI for the preceding calendar year, not to exceed three percent (3%).

The CPI for any calendar year is the average of the Consumer Price Index as of the close of the twelve-month period ending on August 31 of such calendar year.

“Consumer Price Index” means the last Consumer Price Index for All Urban Consumers the West South Central division of the South Region published by the United States Department of Labor.

9 SECTION 3.

Arkansas Code § 26-51-430(c), concerning the indexing of the standard income tax deduction to inflation, is amended to read as follows:

(c)(1) The Secretary of the Department of Finance and Administration shall increase annually the standard deduction provided under subsection (b) of this section by the cost-of-living adjustment for the current calendar year, rounding the amount to the nearest ten dollars ($10.00).

(2)(A)(i) For purposes of subdivision (c)(1) of this section, the cost-of-living adjustment for a calendar year is the percentage, if any, by which the Consumer Price Index for the current calendar year exceeds the Consumer Price Index for the preceding calendar year, not to exceed three percent (3%).

(ii) If the Consumer Price Index for the current calendar year does not exceed the Consumer Price Index for the preceding calendar year, the standard deduction shall not be adjusted under this subsection for that year.

(B) The Consumer Price Index for a calendar year is the average of the Consumer Price Index as of the close of the twelve-month period ending on August 31 of that calendar year.

(C) As used in this subsection, “Consumer Price Index” means the most recent Consumer Price Index for All Urban Consumers the West South Central division of the South Region published by the United States Department of Labor.

SECTION 4.

EFFECTIVE DATE.

Sections 2 and 3 of this act are effective for tax years beginning on or after January 1, 2025.

/s/Ray 02-19-2025 11:01:44 JLL075 As Engrossed:

H2/19/25 HB1065 2 4 6 8 3 02-19-2025 11:01:44 JLL075