Arkansas: Conformity to Certain IRC Provisions Updated

House Bill 1953, which was recently signed into law in Arkansas, readopts certain IRC provisions as of January 1, 2019.

Podcast Transcript

Arkansas, unlike certain states, does not adopt all of the Internal Revenue Code. Rather, the state conforms only to certain sections of the Code as of a specific date and does not advance the conformity date for those specific provisions on a regular basis (i.e., some of the provisions Arkansas adopts were tied to the Code as in effect over a decade ago). House Bill 1953, which was recently signed into law in Arkansas, updates the conformity for numerous Code sections to the Internal Revenue Code as in effect on January 1, 2019. Of particular interest to corporate taxpayers are likely provisions that were revised as a result of federal tax reform. For example, Arkansas has updated its conformity to IRC sections 162 and 274, so the state now adopts the limitations under the Tax Cuts and Jobs Act on certain business and entertainment expense deductions. House Bill 1953 also newly adopts IRC sections 118, 174 and 280C as in effect on January 1, 2019. There are a number of other Code sections that Arkansas now readopts and the bill should be consulted for additional information. All of these changes are effective for tax years beginning on or after January 1, 2019, so these will not apply for the 2018 tax year. Please stay tuned to TWIST for additional conformity updates.

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