Arkansas Response to Bonus Depreciation

CCH, 5/16/02:

The temporary 30% bonus depreciation deduction allowed under the federal Job Creation and Worker Assistance Act of 2002 (P.L. 107-147) (JCWAA), also known as the economic stimulus package, is inapplicable for Arkansas income tax purposes as Arkansas has not adopted those provisions. Arkansas taxpayers must continue to file returns using depreciation and expensing of property provisions found in IRC Secs. 167, 168, 179, and 179A, as in effect on January 1, 1999. The General Assembly, not in session in 2002, would have to enact law incorporating the federal provisions before the new depreciation rules would apply in Arkansas. The Department of Finance and Administration estimates that the state would experience a revenue decrease of $129 million during the first three years, and a revenue increase of $105 million over the next 10 years, if the state does adopt the federal provisions. For more information, taxpayers may go to www.arkansas.gov/dfa.