HB1190
To Create An Income Tax Exemption For Teachers.
AI-Generated Summary
This bill proposes to amend Arkansas's individual income tax laws by creating a new exemption for teachers. It defines a 'teacher' as an individual engaged in K-12 student instruction for over 70% of their contracted time, employed by a public school or an open-enrollment charter school in a licensed teaching, instructional, or educational capacity. The bill allows an exemption from income tax for the first $50,000 of wages earned by an individual for their employment as a teacher. This exemption is set to take effect for tax years beginning on or after January 1, 2025. The primary aim is to provide financial relief to qualifying educators. This change would directly affect the state's tax revenue and the take-home pay of eligible teachers.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill, if enacted, would be individuals who are classified as 'teachers' under the provided definition. This includes those employed in a teaching, instructional, or educational capacity in public K-12 schools or open-enrollment charter schools, provided they spend more than 70% of their contracted time on student instruction and hold the required licenses. These teachers would directly benefit from a reduction in their taxable income, potentially increasing their net take-home pay by up to the amount of tax liability on the first $50,000 of their teaching wages.
Who Might Suffer?
The primary entity that would be negatively impacted by this bill is the state of Arkansas's general fund, due to a projected decrease in individual income tax revenue. By allowing a $50,000 exemption for a significant portion of teachers' wages, the state will collect less tax income. While the bill does not directly target specific taxpayer groups other than teachers, the reduction in tax revenue could potentially impact the state's ability to fund other public services or necessitate future revenue-generating measures, which could indirectly affect various segments of the population.