Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › Regulation 1997-4 - Comprehensive Individual Income Tax Regulations › Rule 26-51-403 - INCOME GENERALLY › Rule 1.26-51-403(b)(13) - Border City Tax Exemption - Texarkana

Current through Register Vol. 49, No. 6, June, 2024
Under certain circumstances, as set forth below in Income
					 Tax Regulation 1977-5, the income of
residents
of Texarkana,
					 Arkansas and Texarkana, Texas, which would normally be subject to Arkansas
					 income tax, will be exempt from Arkansas income tax due to Arkansas' "border
					 city tax exemption" as established by ACA
					 26-52-602.
The Commissioner of Revenues of the State of Arkansas,
					 pursuant to the authority vested in him by Act 118 of 1929, and Act 132 of
					 1965, with the approval of the Governor, does hereby promulgate the following
					 regulations and rules for the orderly administration of Act 48 of 1977, as
					 amended by Act 177 of 1977.
Definitions
. The following words
					 shall have, when used in this regulation, the following meaning:
Texarkana, Arkansas, Resident -- Shall mean an individual
					 who maintains a place of abode within the city limits of Texarkana,
					 Arkansas.
Texarkana, Texas, Resident -- Shall mean an individual who
					 maintains a place of bode within the city limits of Texarkana, Texas.
Individual Taxpayer -- Shall mean a natural person.
1. Texarkana, Arkansas residents are exempt
				  from the Arkansas Income Tax on income received while a bona fide resident of
				  Texarkana, Arkansas, but they shall be required to file an Arkansas Income Tax
				  return.
2. Texarkana, Texas
				  residents are subject to the Arkansas Income Tax on taxable income earned in
				  Arkansas, other than income earned in Texarkana, Arkansas.
3. All other residents of Texas, other than
				  those residents of Texarkana, Texas are subject to the Arkansas Income Tax on
				  taxable income earned in Arkansas, including Texarkana, Arkansas.
4. Texarkana, Arkansas residents are subject
				  to the Arkansas Income Tax on taxable income earned in Arkansas while a
				  resident of any city other than Texarkana, Arkansas.
*5. Employers shall verify to the State of
				  Arkansas the residency of those employees on whom they do not withhold Arkansas
				  Income Tax. Employees shall file the Employee's Withholding Exemption
				  Certificate with the employer if the employee is claiming a Texarkana,
				  Arkansas, residency exemption or a Texarkana, Texas, residency exemption for
				  income earned in Texarkana, Arkansas. The employer shall keep this certificate
				  with his records, under the penalty of being liable for any taxes not properly
				  withheld on his employees. Employers shall also list the names and addresses of
				  all employees during the course of the quarterly tax period or at the time a
				  report is due from the employer.
6.
				  Information furnished by the employee to the employer shall include the
				  physical location of the employee if his mailing address is different from his
				  residence address.
7. An individual
				  taxpayer who is claiming an exemption from Arkansas Income Tax because of a
				  Texarkana, Arkansas, or a Texarkana, Texas residence shall verify to the State
				  of Arkansas that he is indeed a bona fide resident of Texarkana, Arkansas or
				  Texarkana, Texas in a manner that is acceptable to the State of Arkansas.
The effective date of this regulation shall be January 1,
					 1978.
* Withholding forms associated with this exemption
					 are:
AR-4EC (TX) -- Texarkana employee's withholding exemption
					 certificate.
AR-TX -- Completed by employer and provided to employee,
					 shows wages paid during the preceding tax year that are exempt from Arkansas
					 income tax because of the border city exemption.
AR-3Q-Tex -- Completed by employer. All of the employees'
					 Form AR-TXs (a copy of one for each employee) are attached to the AR-3Q-Tex
					 form and sent in to the Withholding Unit.