TO REDUCE THE NUMBER OF EMPLOYEES AN EMPLOYER MUST HAVE TO BE MANDATED TO FILE AN ANNUAL INCOME TAX WITHHOLDING STATEMENT ELECTRONICALLY; AND TO REQUIRE THE ELECTRONIC FILING OF A WITHHOLDING RETURN FOR CERTAIN EMPLOYERS.

SB 503 reduces the employee threshold requiring Arkansas employers to file annual income tax withholding statements electronically, from 125 to 75 employees. This change directly affects Arkansas businesses with 75 or more employees, mandating they submit these tax forms electronically instead of on paper. The bill also requires third-party payroll services handling Arkansas wages to file electronically if their client employers meet the new threshold. It includes a hardship waiver option for employers facing undue difficulty with electronic filing. The law takes effect for tax years beginning January 1, 2025, for the threshold change.