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Bill To Scrap Prepaid Tax Return Debit Cards Clears Committee

Bill To Scrap Prepaid Tax Return Debit Cards Clears Committee

Tax refunds would have to arrive via paper check if taxpayers don't specific how they want the refunds, under a bill that received the support Monday of the House Ways and Means Committee.

House Bill 436 by Rep. Jim Fannin, R-Jonesboro, would end the Revenue department's practice of giving prepaid debit cards to people who don't spell out that they want to receive their tax refunds through direct deposit or paper check.

The prepaid Visa cards have generated complaints since they were introduced two years ago. People have said they don't understand how to use the cards or were charged fees when they did.

Revenue Secretary Tim Barfield said the state saved money by shrinking the number of paper checks issued, but he said the proposal to switch the default tax refund method wouldn't significantly increase his agency's costs.

Twenty percent of tax refunds issued last year involved prepaid debit cards.

The Ways and Means advanced the bill without objection, sending it to the House floor.

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