Title 26, Taxation

(a) A taxpayer must calculate his or her Arkansas income tax liability using the same accounting method for Arkansas income tax purposes as used for federal income tax purposes. (b) A taxpayer must provide to the Secretary of the Department of Finance and Administration a copy of…

(a) A taxpayer must calculate his or her Arkansas income tax liability using the same income year for Arkansas income tax purposes as used for federal income tax purposes. (b) A taxpayer must provide to the Secretary of the Department of Finance and Administration a copy of any c…

(a) The term “net income” means the adjusted gross income of a taxpayer less the deductions allowed by the Income Tax Act of 1929, § 26-51-101 et seq. (b) “Adjusted gross income” means, in the case of an individual, gross income minus the following deductions:(1) Trade and busine…

(a) (1) “Gross income” includes:(A) Gains, profits, and income derived from salaries, wages, or compensation for personal service of whatever kind and in whatever form paid;(B) Gains, profits, and income derived from professions, vocations, trades, business, commerce, or sales;(C…

(a) An individual carrying on business as a partner in a partnership shall be liable for income tax only in his or her individual capacity and shall include in his or her gross income the distributive share of the net income or net loss of the partnership received by him or her o…

(a) Every individual, taxable under the Income Tax Act of 1929, § 26-51-101 et seq., who is a beneficiary of an estate or trust shall include in his or her gross income the distributive share of the income or loss of the estate or trust received by him or her or distributable to …

(a) A financial institution having its principal office in this state shall be taxed as a business corporation organized and existing under the laws of this state. (b) (1) A financial institution having its principal office outside this state but doing business in this state shal…

Dividends paid on shares of stock of financial institutions shall be subject to income tax under the Income Tax Act of 1929, § 26-51-101 et seq., on the same basis as dividends on shares of stock of business corporations.

(a) Subchapter S of the Internal Revenue Code, 26 U.S.C. § 1361 et seq., as in effect on January 1, 2019, regarding small business corporations, is adopted for the purpose of computing Arkansas income tax liability. (b) (1) (A) A corporation shall be treated as a Subchapter S cor…

Whenever, in the opinion of the Secretary of the Department of Finance and Administration, the use of inventories is necessary in order to clearly determine the income of any taxpayer, inventories shall be taken by the taxpayer, upon such basis as the secretary may prescribe, con…

(a) For the purpose of ascertaining the gain or loss from the sale or other disposition of real, personal, or mixed property, the basis shall be, in the case of property acquired before January 1, 1928, the assessed valuation of such property on the county tax books as of that da…

(a) (1) For the purpose of determining gain or loss, when property is exchanged for other property the property received in exchange shall be treated as the equivalent of cash to the amount of its fair market value if a market exists in which all the property so received can be d…

(a) Title 26 U.S.C. §§ 332, 334, 336, 337, and 338, as in effect on January 1, 2007, regarding the liquidations of corporations, are adopted for the purpose of computing Arkansas income tax liability. (b) For the purposes of the application of this section, the transition rule of…

(a) (1) The following sections relating to annuities, retirement savings, and employee benefit plans are adopted for the purpose of computing Arkansas income tax liability, except Arkansas capital gains treatment and the Arkansas tax rates shall apply:(A) Title 26 U.S.C. §§ 72, 2…

Title 26 U.S.C. § 163, as in effect on January 1, 2017, regarding deductions for interest expenses, is adopted for the purpose of computing Arkansas income tax liability.

In computing net income, there shall be allowed as deductions taxes paid or accrued within the income year, imposed by the authority of the United States or any of its possessions or of any state, territory, or any political subdivision of any state or territory, or the District …

(a) Title 26 U.S.C. § 71 [repealed], in effect on January 1, 1987, is adopted for purposes of determining the amount of alimony or separate maintenance to include in the gross income of the recipient. (b) Title 26 U.S.C. § 215 [repealed], in effect on January 1, 1987, is adopted …

(a) In addition to any other state income tax deduction permitted by law, a taxpayer in this state who is maintaining, supporting, and caring for a totally and permanently disabled child in his or her home shall be permitted a deduction on his or her Arkansas income taxes of five…

(a) (1) Title 26 U.S.C. § 170, as in effect on January 1, 2019, regarding deductions for charitable contributions, is adopted for the purpose of computing Arkansas income tax liability.(2) However, with respect to contributions of qualified appreciated stock within the meaning of…

Education service cooperatives created under The Education Service Cooperative Act of 1985, § 6-13-1001 et seq., are declared instrumentalities and political subdivisions of the State of Arkansas, and all contributions and donations made to them in any calendar year are deductibl…

(a) In computing net income for the purposes of the Income Tax Act of 1929, § 26-51-101 et seq., there shall be allowed as deductions in addition to all other deductions allowed by law the fair market value of donated artistic, literary, and musical creations if:(1) The taxpayer …

(a) (1) In computing net income, there shall be allowed as deductions the following expenses:(A) BUSINESS EXPENSES. All of 26 U.S.C. § 162, except subsection (n), as in effect on January 1, 2019, regarding trade or business expenses, is adopted for the purpose of computing Arkans…

(a) (1) In computing net income there shall be allowed as a deduction any loss sustained during the income year and not compensated for by insurance or otherwise.(2) In the case of an individual, the deduction under subdivision (a)(1) of this section shall be limited to:(A) Losse…

In computing net income there shall be allowed as deductions debts ascertained to be worthless and actually charged off the books of the taxpayer within the income year.

Any bank, building and loan, savings and loan, or any other savings institution chartered and supervised as a savings and loan or similar associations under federal or state law shall be allowed a bad debt expense deduction computed in accordance with 26 U.S.C. §§ 582, 585, and 5…

(1) In addition to other deductions allowed by this chapter, there is allowed as a deduction from gross income a net operating loss carryover under the following rules:(1) (A) The net operating loss for any taxable year may be carried over to the next-succeeding taxable year and …

(a) (1) Title 26 U.S.C. §§ 167 and 168(a)-(j), as in effect on January 1, 2019, are adopted for the purpose of computing Arkansas income tax liability for property purchased in tax years beginning on or after January 1, 2014.(2) Title 26 U.S.C. § 179, as in effect on January 1, 2…

(a) In the case of all natural resources for which a deduction for depletion is allowed under 26 U.S.C. §§ 611, the provisions of 26 U.S.C. §§ 611 — 613, 614, 616, and 617, as in effect on January 1, 2019, are adopted in computing the depletion allowance deduction under Arkansas …

(a) (1) In lieu of itemizing deductions, each taxpayer may elect to use the standard deduction.(2) In the case of a married couple, both spouses must elect to use the standard deduction or both spouses must claim itemized deductions, without regard to whether the spouses file sep…

(a) In computing net income, no deduction shall in any case be allowed in respect of:(1) Personal, living, or family expenses, except that any payments of alimony made by an individual pursuant to a court order shall be deductible;(2) Any amount paid for new buildings or for perm…

(a) Nonresidents or part-year residents of Arkansas shall compute their taxable income as if all income were earned in Arkansas. (b) Using Arkansas income tax rates, nonresident or part-year residents of Arkansas shall compute their tax liability on the amount computed in subsect…

(1) Notwithstanding any other provision of the Income Tax Act of 1929, § 26-51-101 et seq., with regard to deductions allowed in computing net income:(1) Title 26 U.S.C. § 465, as in effect on January 1, 1987, is adopted to limit deductions claimed under the Income Tax Act of 192…

(a) In the case of an individual, the miscellaneous itemized deductions for any taxable year shall be allowed only to the extent that the aggregate of those deductions exceeds two percent (2%) of adjusted gross income. (b) As used in this section, “miscellaneous itemized deductio…

(a) Title 26 U.S.C. § 263A(a)-(h), as in effect on January 1, 2019, regarding capitalization and inclusion in inventory costs of certain expenses, are adopted for the purpose of computing Arkansas income tax liability. (b) Title 26 U.S.C. § 195, as in effect on January 1, 2001, r…

(a) (1) Subchapter M of the Internal Revenue Code, 26 U.S.C. § 851 et seq., as in effect on January 1, 2019, relating to regulated investment companies, real estate investment trusts, real estate mortgage investment conduits, and financial asset securitization investment trusts, …

Title 26 U.S.C. § 1043, as in effect on January 1, 1993, is hereby adopted.

(a) Title 26 U.S.C. § 483, as in effect on January 1, 1999, regarding the allocation of unstated interest, is adopted for the purpose of computing Arkansas income tax liability. (b) Title 26 U.S.C. § 7872, as in effect on January 1, 2019, regarding the taxation of foregone intere…

Title 26 U.S.C. § 175, as in effect on January 1, 1995, regarding the deduction of certain expenditures related to soil and water conservation is hereby adopted.

(a) Title 26 U.S.C. § 23, as in effect on January 2, 2013, and 26 U.S.C. § 36C, as in effect on January 2, 2013, are adopted for purposes of determining the allowable credit for adoption-related fees, costs, and expenses paid or incurred by a taxpayer. (b) (1) The amount of credi…

(a) (1) All distributions of funds other than principal from the long-term intergenerational trust shall be taxable as provided in the Income Tax Act of 1929, § 26-51-101 et seq. (2) All distributions from the long-term intergenerational trust shall be deemed principal until all …

(a) In computing net income for the purposes of the Income Tax Act of 1929, § 26-51-101 et seq., there shall be allowed as a deduction in addition to all other deductions allowed by law for a portion of the amount paid by the taxpayer as tuition for the taxpayer, the taxpayer's s…

(a) Title 26 U.S.C. § 530, as in effect on January 2, 2013, relating to educational individual retirement accounts, is adopted for the purpose of computing Arkansas income tax liability. (b) Any additional tax or penalty imposed by this section shall be ten percent (10%) of the a…

(a) In computing net income, there shall be allowed as a deduction the amount paid during a taxable year to the United States Small Business Administration as a guaranty fee associated with the acquisition of United States Small Business Administration financing. (b) The deductio…

(a) Title 26 U.S.C. § 223(a)-(d), (e)(2), (f), and (g), as in effect on January 1, 2011, regarding a deduction from income for amounts deposited to health savings accounts, is adopted for purposes of computing Arkansas income tax liability. (b) A health savings account is exempt …

(a) Title 26 U.S.C. § 1341(a)(1)-(3) and (b)(2), as they existed on January 1, 2013, regarding the computation of income tax when a taxpayer restores a substantial amount held under a claim of right, is adopted for purposes of computing income tax liability under this chapter. (b…

(a) In computing net income for the purposes of the Income Tax Act of 1929, § 26-51-101 et seq., there is allowed as a deduction in addition to all other deductions allowed by law for the:(1) Amount paid by a volunteer firefighter and not reimbursed by the fire department or fire…