Arkansas Tsunami Tax Incentive Credit (ATTIC)
Gov. Mike Huckabee announced Wednesday, January 12, 2005, that any contributions made this month for tsunami relief efforts may be claimed on state tax returns filed this year for tax year 2004. Huckabee held a news conference at the state Capitol to announce a program known as ATTIC — Arkansas Tsunami Tax Incentive Credit.
The Indian Ocean tsunami in December killed more than 150,000 people. Congress recently approved legislation permitting taxpayers to claim January contributions on their federal tax returns. The governor’s administrative action is being taken to meet the filing schedule for 2004 returns. Legislation will be filed by Rep. David Johnson of Little Rock and others to clarify the procedure.
Arkansas taxpayers who have made contributions for the tsunami relief efforts should retain documentation regarding these contributions. Huckabee’s mandate that the state Department of Finance and Administration follow the federal rule will eliminate the administrative complications that would have resulted from taxpayers having different charitable deduction rules for state and federal returns.
“I hope all Arkansans will make contributions between now and the end of January,” the governor said. “The ATTIC deductions can then be claimed on both the state and federal returns. Taking this administrative action prior to passage of the bill hopefully will encourage people to make contributions. It also clears up any possible confusion.”
While the overall goal is to ensure that the Arkansas tax code mimics the federal, there is the slight complication of a lack of an enforceable tax law. Supposedly, a law while be introduced in the current legislative session to correct this oversight. Watch for a future update.
UPDATE 1/23/05
House Bill 1109, Arkansas Tsunami Tax Incentive Credit (ATTIC), has been introduced into the 85th Arkansas General Assembly. The bill has dozens of sponsors and looks like it will pass the House. I expect that a Senate bill will be introduced and approved shortly. Governor Huckabee will probably be able to make good on ATTIC.
Full text of HB1109 (pdf):
http://www.arkleg.state.ar.us/ftproot/bills/2005/public/hb1109.pdf
