LITTLE ROCK, AR - A lawsuit claims that taxing the interest paid on bonds issued by agencies and governments outside Arkansas, but not the interest paid by cities and counties in the state, is unfair to buyers of the out-of-state bonds.
Richard B. Wiley has filed suit in Pulaski County Circuit Court, seeking a refund on income taxes he paid on interest he received as the holder of out-of-state bonds. The suit also seeks a declaration that the state law giving the tax break to holders of Arkansas bonds violates the U.S. Constitution.
The suit filed by Wiley makes claims similar to those in a suit filed in Kentucky, which also takes in-state and out-of-state bonds differently. The U.S. Supreme Court in May agreed to hear an appeal by the state of Kentucky on a ruling by a state appeals court in that case.