HB1366
To Create An Income Tax Credit For Qualified Storm Shelters.
AI-Generated Summary
This bill proposes to create an income tax credit for residents of Arkansas who install qualified storm shelters at their primary residences. A qualified storm shelter is defined as one capable of withstanding a Category 5 tornado, meeting Federal Emergency Management Agency (FEMA) criteria, and being attached to or located on the same lot as the primary residence. The credit allowed will be 50% of the total cost of construction, acquisition, and installation, up to a maximum of $3,000 per taxpayer. However, any costs reimbursed by insurance, grants, or other government subsidies will be excluded. The total amount of income tax credits awarded statewide is capped at $2,000,000 annually. To claim the credit, taxpayers must first file an informational report with the Division of Emergency Management, which will issue tax credit certificates on a first-come, first-served basis until the annual cap is reached. Taxpayers who miss the cap can resubmit their report in the following year. The Division of Emergency Management will also provide an annual report on the program's usage.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill would be Arkansas homeowners who install qualified storm shelters at their primary residences. This includes individuals seeking to enhance their safety during severe weather events and potentially reduce damage to their property. Homeowners who undertake the expense of building or acquiring a qualifying storm shelter would directly benefit from the reduction in their state income tax liability. Businesses that manufacture, sell, or install storm shelters that meet the bill's specifications would also likely see increased demand and sales.
Who Might Suffer?
The state of Arkansas, specifically its revenue from income taxes, would be negatively impacted by this bill. The provision of tax credits will reduce the total amount of income tax collected by the state. The total cap of $2,000,000 in credits means that the state's revenue will be reduced by this amount if the maximum number of credits are claimed. Additionally, taxpayers who do not qualify for or are unable to obtain the tax credit due to the annual cap being met may be negatively impacted if they were anticipating this financial relief for their storm shelter installation.