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1 State of Arkansas A Bill
2 95th General Assembly
3 Regular Session, 2025 SENATE BILL 529
4
5 By: Senator B. Johnson
6 By: Representative Cavenaugh
7
8 For An Act To Be Entitled
9 AN ACT TO AMEND THE INDEPENDENT TAX APPEALS
10 COMMISSION ACT; AND FOR OTHER PURPOSES.
11
12
13 Subtitle
14 TO AMEND THE INDEPENDENT TAX APPEALS
15 COMMISSION ACT.
16
17 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
18
19 SECTION 1. Arkansas Code � 26-18-1104 is amended to read as follows:
20 26-18-1104. Definition Definitions.
21 As used in this subchapter, "taxpayer":
22 (1) "Small claim" means a claim in which the disputed tax at
23 issue, excluding any penalties and interest, is less than ten thousand
24 dollars ($10,000); and
25 (2) "Taxpayer" means an individual or entity that:
26 (1)(A) Is challenging the state's taxing jurisdiction over
27 the taxpayer; or
28 (2)(B) Has standing to challenge a decision by the
29 Department of Finance and Administration:
30 (A)(i) Imposing liability for a tax, penalty, or
31 interest;
32 (B)(ii) Denying a credit or deduction;
33 (C)(iii) Denying a refund, credit, or incentive
34 claim or application;
35 (D)(iv) Canceling, refusing, or revoking a license
36 or permit under � 26-18-601, � 26-52-803, � 26-55-219, � 26-55-224, � 26-55-
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1 231, � 26-56-204, � 26-56-311, � 26-57-413, � 26-57-419, or � 26-62-204;
2 (E)(v) Closing a noncompliant taxpayer's business;
3 (F)(vi) Relating to a jeopardy assessment;
4 (G)(vii) Seizing a vending device or a coin-operated
5 amusement device; or
6 (H)(viii) Taking any other action that provides a
7 taxpayer the right to a hearing with the Tax Appeals Commission under state
8 law.
9
10 SECTION 2. Arkansas Code � 26-18-1106(d), concerning the appointment
11 of commissioners to the Tax Appeals Commission, is amended to read as
12 follows:
13 (d) Each commissioner shall receive an annual salary and benefits
14 comparable to the salary and benefits provided to state district court judges
15 as prescribed by law and appropriated by the General Assembly.
16
17 SECTION 3. Arkansas Code � 26-18-1106(f)(3)(A), concerning the
18 appointment of commissioners of the Tax Appeals Commission, is amended to
19 read as follows:
20 (3)(A) The Governor may appoint:
21 (i) A commissioner to fill a vacancy from the
22 relevant pool of candidates nominated under this subsection; or
23 (ii) An individual not nominated under this
24 subsection who meets the applicable licensure requirements of a particular
25 pool has at least five (5) years' experience in a professional occupation
26 related to Arkansas state taxes and who otherwise meets the qualification
27 requirements stated in � 26-18-1107.
28
29 SECTION 4. Arkansas Code � 26-18-1107(a), concerning the
30 qualifications of commissioners of the Tax Appeals Commission, is amended to
31 read as follows:
32 (a) Each commissioner of the Tax Appeals Commission shall:
33 (1) Be a qualified elector of the State of Arkansas;
34 (2) Either:
35 (A) Be licensed to practice law in the state or certified
36 as a certified public accountant in the state, or both; or
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1 (B) Shall have at least five (5) years' experience in a
2 professional occupation related to Arkansas state taxes; and
3 (3) Possess substantial knowledge of Arkansas tax law.
4
5 SECTION 5. Arkansas Code � 26-18-1109(a), concerning employees of the
6 Tax Appeals Commission, is amended to read as follows:
7 (a) The Tax Appeals Commission:
8 (1) May employ a clerk, an assistant, and other may hire
9 employees as necessary to carry out the duties of the commission; and
10 (2) Shall employ:
11 (A)(i) A staff attorney.
12 (ii) The duties of the staff attorney shall include
13 without limitation assisting the commissioners with drafting decisions; and
14 (B) An accountant who has experience in tax issues related
15 to manufacturing and business.
16
17 SECTION 6. Arkansas Code � 26-18-1110(a)(4)(B), concerning the
18 jurisdiction of the Tax Appeals Commission, is amended to read as follows:
19 (B) The commission shall not extend the deadline for:
20 (i) A taxpayer to file a petition under � 26-18-
21 1113; or
22 (ii) The commission to issue a decision, except as
23 otherwise provided under � 26-18-1116(b).
24
25 SECTION 7. Arkansas Code � 26-18-1110(b) and (c), concerning the
26 jurisdiction of the Tax Appeals Commission, are amended to read as follows:
27 (b) The commission does not have jurisdiction to:
28 (1) Hear disputes involving taxes that are excepted from the
29 Arkansas Tax Procedure Act under � 26-18-102;
30 (2) Decide questions regarding the constitutionality of the
31 application of statutes to a taxpayer or the constitutionality of rules
32 promulgated by the department;
33 (3) Hear a claim for protection against enforcement of an
34 illegal exaction under Arkansas Constitution, Article 16, � 13; or
35 (4) Hear or decide claims for which the Office of Hearings and
36 Appeals has issued an administrative decision; or
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1 (5) Hear or decide a claim that is the subject of pending
2 litigation.
3 (c) Upon the creation of the commission:
4 (1) The Office of Hearings and Appeals shall hear a proceeding
5 resulting from an action or decision by the secretary, including without
6 limitation the issuance of a proposed assessment, a refund claim denial, or
7 any other matter brought by a taxpayer, that was issued before January 1,
8 2023;
9 (2) The commission shall hear a proceeding resulting from an
10 action or decision by the secretary, including without limitation the
11 issuance of a proposed assessment, a refund claim denial, or any other matter
12 brought by a taxpayer, that was issued on or after January 1, 2023; and
13 (3) A taxpayer that has a matter pending before the Office of
14 Hearings and Appeals for which a hearing or prehearing has not been held may
15 elect to have the taxpayer's matter transferred to the commission.
16
17 SECTION 8. Arkansas Code � 26-18-1111(b), concerning the settlement of
18 tax disputes under the Independent Tax Appeals Commission Act, is amended to
19 read as follows:
20 (b) If a matter is settled after a petition has been filed with the
21 Tax Appeals Commission under this subchapter, the parties shall notify the
22 commission so that the matter is withdrawn file a motion to withdraw the
23 matter from consideration by the commission.
24
25 SECTION 9. Arkansas Code � 26-18-1113(c)-(f), concerning pleadings
26 filed under the Independent Tax Appeals Commission Act, are amended to read
27 as follows:
28 (c)(1) The department shall file an answer to a petition filed under
29 this section within sixty (60) days of receipt of the notice from the
30 commission under subdivision (b)(2) of this section.
31 (2)(A) The department shall serve a copy of the answer on the
32 taxpayer's representative, or, if the taxpayer is not represented, on the
33 taxpayer directly.
34 (B) An attorney's certification that the attorney sent the
35 pleading by a means of service authorized under � 26-18-1112 is sufficient
36 proof of service under subdivision (c)(2)(A) of this section.
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1 (d)(1) A taxpayer may:
2 (A)(1) File a reply to an answer filed under subsection
3 (c) of this section within thirty (30) days of the date the answer was served
4 on the taxpayer or the authorized representative of the taxpayer; or
5 (B)(2) Move for default judgment if no answer was filed,
6 unless the petition was for a small claim.
7 (2) The taxpayer shall:
8 (A) Serve a copy of a reply filed under subdivision (d)(1)
9 of this section on the authorized representative of the department; and
10 (B)(i) File proof of service of the reply filed under
11 subdivision (d)(1) of this section with the reply.
12 (ii) A certification by the taxpayer or the
13 authorized representative of the taxpayer stating that he or she sent the
14 pleading by a means of service authorized under � 26-18-1112 is sufficient
15 proof of service under subdivision (d)(2)(B)(i) of this section.
16 (e)(1)(A) Within thirty (30) days after a reply has been filed or the
17 deadline to file a reply has passed, the commission shall schedule a hearing
18 to be held within ninety (90) days of the date the reply was filed or the
19 deadline to file a reply passed.
20 (B) For a small claim, if either party requests a hearing
21 and the commission elects to hold a hearing, within thirty (30) days of
22 service of the petition on the department, the commission shall schedule a
23 hearing, which shall occur within sixty (60) days of service of the petition
24 on the department.
25 (2)(A) Before scheduling a hearing under this section, the Chief
26 Commissioner of the Tax Appeals Commission shall assign the proceeding to one
27 (1) commissioner or to all available commissioners sitting en banc, depending
28 on the nature and significance of the proceeding.
29 (B) There is a presumption that proceedings:
30 (i) For which the net amount of the tax deficiencies
31 and claimed refunds in controversy does not exceed twenty-five thousand
32 dollars ($25,000), exclusive of interest and penalties, should be assigned to
33 one (1) commissioner;
34 (ii) Identified in subsection (g) of this section
35 should be assigned to one (1) commissioner; and
36 (iii) For which the net amount of the tax
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1 deficiencies and claimed refunds in controversy exceeds two hundred fifty
2 thousand dollars ($250,000), exclusive of interest and penalties, should be
3 assigned to all commissioners sitting en banc.
4 (3) Before a hearing is held, the chief commissioner may
5 reassign the proceeding to one (1) commissioner or to all commissioners
6 sitting en banc.
7 (4) For a petition to be decided on written submissions,
8 including a petition for a small claim, the commission shall provide for the
9 orderly close of the record without a hearing.
10 (f)(1) Either party may amend a pleading one (1) time without leave at
11 any time before the period for responding to the pleading expires.
12 (2) After the period for responding to a pleading expires, a
13 pleading may be amended only with the written consent of the adverse party or
14 with the permission of the commission.
15 (3) The commission shall allow a party to file an answer or
16 reply, or both, to an amended pleading, and the commission shall specify a
17 deadline for filing the answer or reply, or both.
18 (4) A taxpayer shall not amend the taxpayer's petition after the
19 expiration of the time for filing a petition if the amended petition would
20 have the effect of conferring jurisdiction over a matter that would otherwise
21 not come within the jurisdiction of the commission because of the statute of
22 limitations or otherwise.
23 (5) The commission shall provide notice of an amended pleading
24 to the adverse party.
25
26 SECTION 10. Arkansas Code � 26-18-1113, concerning pleadings filed
27 under the Independent Tax Appeals Commission Act, is amended to add
28 additional subsections to read as follows:
29 (h) A petition for a small claim is subject to a streamlined
30 proceeding process as prescribed by the commission unless, upon the election
31 of the commission or a motion of a party, the commission designates
32 otherwise.
33 (i) The commission may stay proceedings under this subchapter,
34 including proceedings on a petition for a small claim, and direct the parties
35 to confer regarding a voluntary resolution to the dispute on which a petition
36 is based.
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1
2 SECTION 11. Arkansas Code � 26-18-1115(j), concerning hearings under
3 the Independent Tax Appeals Commission Act, is amended to read as follows:
4 (j) Except in a case involving the denial of a claim for refund or a
5 small claim, the taxpayer shall have the right to have the taxpayer's case
6 heard before paying any of the amounts asserted as due by the Department of
7 Finance and Administration.
8
9 SECTION 12. Arkansas Code � 26-18-1115(l), concerning hearings under
10 the Independent Tax Appeals Commission Act, is amended to read as follows:
11 (l)(1) A taxpayer may elect to have the taxpayer's petition heard:
12 (A) In person;
13 (B) By teleconference;
14 (C) By videoconference;
15 (D) By any combination of in-person, teleconferencing, or
16 videoconferencing means; or
17 (E) Solely upon the documents filed with the commission.
18 (2) The taxpayer shall make an election under subdivision (l)(1)
19 of this section in the taxpayer's initial petition.
20 (3) If the taxpayer fails to make an election under subdivision
21 (l)(1) of this section in the taxpayer's initial petition, the petition shall
22 be set for an in-person hearing in Little Rock with an option for the
23 taxpayer to participate by teleconference or videoconference.
24 (4)(3) The taxpayer may amend an election under this subsection:
25 (A) Up to the date the taxpayer's reply is filed or due to
26 be filed; or
27 (B) With the consent of the commission after notice to the
28 department and an opportunity to be heard.
29 (5)(4) The department may elect to appear by teleconference or
30 videoconference for a hearing.
31 (6)(5) The commission may require a hearing by a means other
32 than the means elected by the taxpayer for good cause or when it is in the
33 interest of justice.
34
35 SECTION 13. Arkansas Code � 26-18-1116(b)(1), concerning decisions of
36 the Tax Appeals Commission, is amended to read as follows:
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1 (b)(1)(A) Except as provided in subdivision (b)(1)(B) of this section,
2 a decision of the commission under this section shall be issued no later than
3 ninety (90) days after the submission of the last pleading or brief filed or
4 the completion of the hearing or the closure of the record, whichever is
5 later.
6 (B) The commission shall issue a decision:
7 (i) Within five (5) business days after a hearing is
8 concluded under � 26-18-402;
9 (ii) Within three (3) business days after a hearing
10 is concluded under � 26-18-601(b);
11 (iii)(ii) Within five (5) business days after a
12 hearing is concluded under � 26-18-402, � 26-18-1002, � 26-55-247, or � 26-
13 57-1212; and
14 (iv)(iii) Within twenty (20) calendar days after a
15 hearing is concluded under � 26-18-507(e)(1)(B)(ii), � 26-18-601(c), or � 26-
16 36-315(c), � 26-55-224, � 26-55-231, � 26-56-204, � 26-56-311, � 26-57-413, �
17 26-62-204, or � 26-57-419;
18 (v) Within twenty (20) calendar days after a hearing
19 is concluded under � 26-55-224, � 26-56-204, or � 26-62-204;
20 (vi) Within twenty (20) calendar days after a
21 hearing is concluded under � 26-55-231, � 26-56-311, � 26-57-413, or � 26-57-
22 419;
23 (vii) Within five (5) business days after a hearing
24 is concluded under � 26-55-247; and
25 (viii) Within five (5) business days after a hearing
26 is concluded under � 26-57-1212.
27
28 SECTION 14. Arkansas Code � 26-18-1116(d)(1), concerning decisions of
29 the Tax Appeals Commission, is amended to read as follows:
30 (d)(1) The interpretation of a taxing statute adopted by the
31 commission in a proceeding en banc shall be followed by the commission in
32 subsequent cases involving the same statute.
33
34 SECTION 15. Arkansas Code � 26-18-1118(a)(3), concerning
35 representation of a taxpayer under the Independent Tax Appeals Commission
36 Act, is amended to read as follows:
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1 (3) If the taxpayer fails to attach a power of attorney to the
2 petition, the commission shall allow the taxpayer thirty (30) calendar days
3 from notice of the deficiency to file the required power of attorney.
4
5 SECTION 16. Arkansas Code � 26-18-1120 is amended to read as follows:
6 26-18-1120. Rules.
7 The Tax Appeals Commission shall promulgate rules and forms to:
8 (1) Carry out the intent and purpose of this subchapter; and
9 (2) Implement the duties assigned to the commission, including
10 without limitation rules:
11 (A) Governing pleadings and service of process
12 requirements to commence a hearing under this subchapter and the practice and
13 procedure rules of the commission;
14 (B) To provide for expedited proceedings;
15 (C) To establish guidelines for the redaction of
16 personally identifying taxpayer information in published decisions; and
17 (D) To establish a procedure for petitions and hearings
18 under:
19 (i) Section 26-18-402;
20 (ii) Section 26-18-601(b) and (c);
21 (iii) Section 26-18-1002;
22 (iv) Section 26-36-315;
23 (v) Section 26-55-219;
24 (vi) Section 26-55-224;
25 (vii) Section 26-55-231;
26 (viii) Section 26-55-247;
27 (ix) Section 26-56-204;
28 (x) Section 26-56-311;
29 (xi) Section 26-57-413;
30 (xii) Section 26-57-419;
31 (xiii) Section 26-57-1212; and
32 (xiv) Section 26-62-204.
33
34
35
36
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