Arkansas establishes Independent Tax Appeals Commission for dispute resolution

On March 19, 2025, Arkansas lawmakers introduced Senate Bill 529, a significant piece of legislation aimed at reforming the state's tax dispute resolution process. The bill seeks to establish an Independent Tax Appeals Commission, which would provide a structured avenue for taxpayers to contest decisions made by the Arkansas Department of Finance and Administration.

The primary purpose of SB 529 is to streamline the handling of tax disputes, particularly those involving proposed assessments and refund claim denials. The bill outlines that the newly created commission will hear cases related to actions taken by the department, specifically addressing matters issued before and after January 1, 2023. Taxpayers with pending cases before the Office of Hearings and Appeals will have the option to transfer their disputes to the new commission, potentially expediting the resolution process.

Key provisions of the bill include amendments to existing laws governing tax appeals, such as the requirement for the department to respond to petitions within 60 days and the process for notifying the commission when a matter has been settled. These changes aim to enhance transparency and efficiency in tax dispute resolutions.

The introduction of SB 529 has sparked notable discussions among lawmakers and stakeholders. Proponents argue that the bill will provide taxpayers with a fairer and more accessible means of contesting tax decisions, thereby improving public trust in the tax system. However, some critics express concerns about the potential for increased bureaucracy and the implications of transferring cases from the Office of Hearings and Appeals to the new commission.

The economic implications of SB 529 could be significant, as a more efficient tax dispute resolution process may encourage compliance and reduce the backlog of cases. Additionally, the bill could have social ramifications by ensuring that taxpayers feel their grievances are heard and addressed in a timely manner.

As the legislative process unfolds, the future of SB 529 remains uncertain. If passed, it could reshape the landscape of tax appeals in Arkansas, potentially setting a precedent for similar reforms in other states. Lawmakers and taxpayers alike will be watching closely as discussions continue in the coming weeks.