Arkansas lawmakers approve bill increasing homestead tax credit

Arkansas lawmakers sent Gov. Sarah Huckabee Sanders legislation that would raise the property tax credit that thousands of homeowners receive for their primary residence.

Sanders’ office said the Republican governor planned to sign into law the legislation, which will raise the homestead property tax credit from $375 to $425.

The Senate approved the bill by a 33-0 vote on Thursday. The state Department of Finance and Administration has projected the increase, which the House approved by a 99-0 vote earlier this month, would cost the state $34 million next year.

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More than 711,000 people received the tax credit in 2022.

The credit is funded by a one-half cent statewide sales and use tax. The tax credit was established through a constitutional amendment approved by voters in 2000. It was last raised in 2019 by former Gov. Asa Hutchinson, Sanders’ Republican predecessor.