Bill > HB1116

This bill, known as the Remote and Mobile Work Modernization and Competitiveness Act, aims to modernize Arkansas's tax code for remote and mobile workers by introducing several key provisions. The legislation recognizes the growing trend of remote and hybrid work, with findings that 13% of U.S. employees work from home and 28% work in a hybrid model. The bill allows the Department of Finance and Administration to enter into reciprocity agreements with other states to exempt residents from income tax under certain conditions. It creates an income tax exemption for individuals who earn $2,500 or less while working in Arkansas and perform employment duties in multiple states. The bill also modifies withholding requirements, exempting employers from tax withholding for employees who work in the state for 15 or fewer calendar days per year and perform duties in multiple states. Additionally, the legislation provides employers with protection from penalties if they maintain a time and attendance system or rely on reasonable records to determine withholding requirements. The bill aims to make Arkansas's tax code more attractive to remote workers by reducing administrative burdens and creating more flexible tax policies, with the provisions set to take effect for tax years beginning on or after January 1, 2026.

Budget and Finance

https://arkleg.state.ar.us/Bills/Detail?id=hb1116&ddBienniumSession=2025%2F2025R