Bill > HB1501

This bill updates Arkansas state income tax law to align with certain federal income tax provisions related to depreciation and expensing of business property. Specifically, the bill adopts the federal tax code sections 167, 168(a)-(j), and 168(k) for calculating income tax liability for property purchased in different tax years. It incorporates the federal rules for depreciation (how businesses account for the declining value of assets over time) and expensing (immediately deducting the full cost of certain business assets) from specific versions of the federal tax code as of January 1, 2019, 2022, and 2024. The most recent addition is section 168(k), which will be adopted for property purchased in tax years beginning on or after January 1, 2025. These changes will allow Arkansas businesses to use the same tax deduction and expensing rules for state income tax purposes as those allowed under federal tax law, potentially providing more favorable tax treatment for businesses investing in depreciable assets.