The Arkansas General Assembly has approved a significant tax relief measure for farmers and agriculture businesses that now goes to the Governor for his signature, which is expected according to statements made by Governor Hutchinson. House bill 1361 by Representative Eaves would exclude from the definition of income the financial aid that a taxpayer received through certain federal coronavirus relief programs, including loan forgiveness under the Paycheck Protection Program (PPP); Small Business Administration grants under the Economic Injury Disaster Loan program; and payments received under the Coronavirus Food Assistance Program (CFAP). In 2020, Representative Joe Jett successfully carried a similar amendment related to Market Facilitation Program (MFP) payments to farmers (A.C.A. ยง 26-51-316).
According to the Department of Finance and Administration, HB1361 would have a significant revenue impact by reducing state general revenue by $33 million in fiscal 2021, which ends June 30, and by $179 million in fiscal 2022, which begins July 1. Because of this revenue impact, the ability to enact new spending or make further reductions in income taxes will be more challenging to enact due to revenue stabilization requirements that require balanced budgets for the state.
More below:
https://www.arkansasonline.com/news/2021/feb/26/state-tax-exemption-on-covid-aid-advances/