Wednesday, October 16, 2019
TAX REFORM CONTINUES:  A Spotlight on Arkansas

With the passage of the Tax Cuts and Jobs Act (TCJA) in late 2017, most of the talk regarding tax reform has focused on the changes to the federal tax laws under the Internal Revenue Code (IRC). However, during the 92nd General Assembly, which concluded on April 24, Arkansas prioritized and passed numerous changes to its own tax laws.

First and foremost, the legislative session produced the passage of Acts 182 and 822, which were both a product of the Arkansas Tax Reform and Relief Legislative Task Force. In general, they reduced the top individual income tax rate to 5.9% from 6.9%, consolidated the individual income tax brackets into three brackets (from six) and reduced the corporate income tax rate to 5.9% (from 6.5%). The rate reductions will be phased in for a period of two years beginning in 2020 for individuals and 2021 for corporations.

Second, Act 822 made a substantial change to the way businesses apportion their multistate income to the state of Arkansas. Under Act 822, beginning in 2021 a taxpayer’s multistate business income is apportioned to the state based upon a single-sales factor (rather than Arkansas’ previous “double-weighted sales” approach, which included not only a sales factor but also property and payroll factors). This means in 2021, a taxpayer will apportion its multistate business income to the state by dividing its Arkansas sales by its total multistate sales, then multiplying that fraction by its total income. The resulting income is allocable to the state and subject to Arkansas state income taxes (which may be good or bad depending upon tax rates in other states in which the business operates).

Third, Act 822 extended the net operating loss carryforward period to 10 years (from five). The extension of the net operating loss carryforward will be phased in for a period of two years beginning in 2020.

Act 822 also expanded Arkansas’ sales and use tax laws to require collection of sales or use tax by “remote sellers” who sell more than $100,000 in goods in Arkansas in a given year, or engage in more than 200 transactions. This change took effect July 1 and is generally in line with the United States Supreme Court’s decision in South Dakota v. Wayfair, a highly publicized case regarding the state taxation of an e-commerce retailer.
Tax Planning Update Seminars Scheduled

The firm's Tax Update Planning Seminars will take place in Little Rock on November 13 and in Rogers on November 21 from 8:30 a.m. to 4:30 p.m. Attendees will qualify for 8 hours of CPE credit and 7 hours of CLE credit (which includes one hour of ethics). Space is limited and the cost of registration is $100.

We will cover updates on:
  • 199A Income Deduction
  • Employee Benefits
  • Qualified Opportunity Zones
  • Ethical Responsibilities
  • Like-Kind Exchanges
  • Trust & Estate Planning
  • Health & Welfare Plans
November 13, 2019
UA Little Rock School of Law
November 21, 2019
Embassy Suites - Rogers
If you have any questions about these seminars,
please contact Tabitha Doddridge at 501-370-1455.
Mergers & Acquisitions
The article in this newsletter was originally published by the Northwest Business Journal.

This is not a substitute for legal advice and should be considered for general guidance only.

For more information or if you have further questions, please contact one of our  Mergers and Acquisitions Attorneys.
About the Firm

Friday, Eldredge & Clark, LLP serves business, non-profit, governmental and individual clients in Arkansas and across the United States. It is one of the oldest law firms in the state and has been the largest Arkansas-based law firm for more than 50 years. The firm has practice areas focusing on General Litigation; Class Action and Business Litigation; Railroad; Labor and Employment; Medical Malpractice; Public Finance; Healthcare; Estate Planning and Probate; Employee Benefits; Real Estate and Commercial Transactions; and Merger and Acquisitions. Friday, Eldredge & Clark has offices in Little Rock, Fayetteville and Rogers, Arkansas. For more information, visit
Mergers & Acquisitions

Friday, Eldredge & Clark represents buyers and sellers in a variety of mergers, acquisitions and divestitures. We are committed to providing you with exemplary service and common sense advice. We bring a practical approach to each transaction, one that understands your sensitivity to cost and flexibility.

Our goal is to add value to each transaction as we identify potential problems and develop innovative solutions to tackle the toughest issues up front. Whether your organization is a multinational corporation, a publicly or privately-owned business entity, a not-for-profit organization or an investment firm, our firm has the knowledge, experience and resources to facilitate a successful transaction.