Arkansas lawmakers debate business property tax assessment reform

The Arkansas House City, County - Local Affairs Committee convened on April 2, 2025, to discuss significant issues surrounding property tax assessments and the burdens they place on local businesses. A central topic was the annual requirement for businesses to submit detailed property assessments, which many committee members criticized as outdated and overly burdensome.

One business owner expressed frustration over the necessity to report items like old furniture and office supplies, suggesting that the process is a "waste of time." The owner proposed eliminating the assessment form altogether, arguing that larger businesses often pay a fee to bypass this requirement, highlighting a disparity in how businesses are treated.

Russell Hill, the county assessor, explained the current process, noting that while the detailed assessments are intended to ensure accuracy, they can overwhelm new business owners. He acknowledged that many businesses fail to submit their assessments, leading to "forced assessments" where the county estimates property values based on square footage and type of business. This method, he noted, often results in higher tax bills than if businesses had submitted their actual assessments.

The committee also discussed House Bill 1912, which aims to reduce the assessed value cap from 20% to 15%. Proponents argue this change would provide relief to taxpayers facing rising property taxes, particularly in areas where property values have surged. However, opponents, including representatives from the Assessors Association, warned that such a reduction could significantly decrease funding for local schools, as property taxes are a primary revenue source for education.

The committee ultimately decided to pull the bill for further consideration, acknowledging the need for a more thorough discussion on the implications of such tax reforms. The chair emphasized the importance of balancing the needs of businesses with the financial requirements of local governments and schools.

In conclusion, the meeting underscored ongoing tensions between tax policy and business operations in Arkansas, with calls for reform aimed at alleviating the financial burden on local businesses while ensuring adequate funding for essential services. The committee plans to revisit these issues in future sessions, indicating that discussions around property tax assessments and their impact on the local economy are far from over.