TO AMEND THE PENALTIES IMPOSED FOR FAILURE TO COMPLY WITH THE ARKANSAS TAX PROCEDURE ACT.

Fiscal Impact Statement Bill: HB1904 Bill Subtitle: TO AMEND THE PENALTIES IMPOSED FOR FAILURE TO COMPLY WITH THE ARKANSAS TAX PROCEDURE ACT. --------------------------------------------------------------------------------------------------------------------------------------- Sponsors: Rep. Lundstrum and Sen. Petty Basic Change: HB1904 amends the penalties for failure to file or pay taxes by lowering the maximum aggregate penalty that can be imposed from 35% to 10%. Under current law, a taxpayer who fails to file any return is subject to a penalty of 5% of the amount of tax due. The penalty increases by 5% each month until either the return is filed or a maximum penalty of 35% is reached. The penalty for failure to pay tax due is calculated in the same manner and subject to the same 35% maximum unless the failure to pay is for individual income tax. In that case, the penalty increases by only 1% per month until the amount is paid or the 35% maximum penalty is reached. HB1904 limits the maximum penalty to 10% instead of 35% in all of these cases. Fiscal Impact: FY2026 – $11.9 million General Revenue Reduction Taxpayer Impact: A taxpayer who fails to file or pay taxes on time will b