To: Representative David Ray
From: Mattias Gugel, Director of State External Affairs, National Taxpayers Union
Date: July 1, 2025
Subject: Introduction of Remote and Mobile Work Modernization Competitiveness Act
I. Introduction and Key Taxpayer Considerations
On behalf of National Taxpayers Union (NTU), the nation’s oldest taxpayer advocacy organization, we write to thank you for introducing H.B. 1116, the Remote and Mobile Work Modernization Competitiveness Act. This legislation represents a major step toward modernizing Arkansas’ tax treatment of nonresident workers who perform short-term work in the state—a common-sense fix your constituents will appreciate.
II. The Remote and Mobile Work Modernization Competitiveness Act
NTU strongly supports H.B. 1116. Currently, nonresidents who perform just a single day of work in Arkansas are subject to burdensome tax filing and compliance obligations, as are their employers. Not only does this waste the time of taxpayers and employers who file tax returns for negligible Arkansas incomes, it also wastes the resources of the Department of Finance and Tax Administration, which must collect, process, and enforce these taxpayer obligations even when the revenue at issue is minimal.
Take a nurse from Memphis picking up a one-day shift in West Memphis, or a Missouri-based electrician helping on a two-day job in Fort Smith—they’re often required to file Arkansas income taxes for these brief stints. That’s not just inefficient; it’s off-putting. And it discourages economic activity that could benefit your constituents.
Arkansas is becoming increasingly unique in how difficult it makes tax compliance for out-of-state individuals and businesses. Currently, Arkansas ranks 47th out of 50 states on the National Taxpayers Union Foundation’s Remote Obligations and Mobility (ROAM) Index, NTUF’s metric of the tax compliance burdens that states place upon nonresidents. Two states that were previously ranked below Arkansas, Nebraska and Alabama, passed laws in the past year that implement thresholds exempting certain de minimis activities from tax compliance obligations. If Arkansas doesn’t act soon, Arkansas risks standing out even more as a state to avoid.
Fortunately, H.B. 1116 offers a significant incremental step forward. By waiving filing requirements for nonresident taxpayers who earn $2,500 or less in Arkansas, H.B. 1116 would provide relief from tax compliance obligations for taxpayers with the most minimal economic activity in the state. This is a common-sense change—most taxpayers with such Arkansas-sourced income below this threshold will end up paying more to TurboTax or H&R Block to file another state income tax return than they will to Arkansas.
Additionally, H.B. 1116 also provides employers from relief from withholding obligations when employees work for 15 or fewer days in Arkansas. Particularly for small businesses, withholding obligations and compliance with another state’s tax code can be a significant burden—enough to make them think twice about sending workers across state lines.
The highest-scoring states on the ROAM Index go even further, offering both filing and withholding thresholds of 30 days. Day-based thresholds provide greater simplicity and are more intuitive for taxpayers to track than wage-based thresholds.
Even though H.B. 1116 would not take Arkansas to the ranks of the highest-scoring states on the ROAM Index, it would move Arkansas from 47th all the way up to 17th. With a minimal revenue impact, H.B. 1116 would raise Arkansas from one of the worst states for nonresidents to do business into one of the better ones.
This is a straightforward fix that your constituents—especially those running small businesses or working across state lines—will appreciate. It sends the message that Arkansas is open for business and committed to cutting red tape. We’re eager to work with you to get this passed and ensure Arkansas is leading, not lagging, in taxpayer-friendly reform.