House-Approved Tax Gets Chilly Reception In Senate Panel

Several tax cuts approved by the Arkansas House, including a proposed one-day sales tax holiday and a $42 million cut in the income tax on capital gains, have gotten a chilly reception in a Senate committee.

State fiscal officials had warned about the impact they would have on the state's budget.

The proposed sales tax holiday would have created a one-day exemption for clothing that costs less than $75. The bill died in committee today after no one seconded a motion to take a vote on the measure. It would have created the holiday on the first Saturday in August during the back-to-school shopping season.
State finance officials said the exemption would have cost the state $1.6 million a year.

The proposed $42 million cut in the capital gains tax faced a similar fate. Rep. Ed Garner of Maumelle said the proposal would help promote investment and help create jobs in the state. The proposed tax cut faced resistance from Beebe and fiscal officials over fears that the state could not afford another cut in revenue. Beebe has already signed into law cuts in the sales tax on groceries and the tax manufacturers pay on utilities.