Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
94th General Assembly A Bill 2
Regular Session, 2023 SENATE BILL 133 3
4
By: Senators J. Payton, J. Dotson, G. Stubblefield, Stone, D. Sullivan 5
By: Representatives Lundstrum, Andrews, Beck, S. Berry, M. Brown, John Carr, C. Cooper, Duffield, 6
Ennett, Hawk, D. Hodges, G. Hodges, Hollowell, Hudson, Ladyman, Long, Lynch, Maddox, McAlindon, 7
McClure, McCollum, McCullough, McGrew, S. Meeks, J. Moore, Painter, Pearce, Puryear, R. Scott 8
Richardson, Rose, Underwood, Unger, Watson, D. Whitaker, Womack 9
10
For An Act To Be Entitled 11
AN ACT TO AMEND THE SALES AND USE TAX AP PLICABLE TO 12
NEW AND USED MOTOR V EHICLES, TRAILERS, A ND 13
SEMITRAILERS; TO INC REASE THE SALES AND USE TAX 14
EXEMPTION FOR USED M OTOR VEHICLES; TO RE PEAL THE 15
SPECIAL RATE OF TAX FOR CERTAIN USED MOT OR VEHICLES, 16
TRAILERS, AND SEMITR AILERS; TO REPEAL TH E SALES AND 17
USE TAX EXEMPTION FOR NE W MOTOR VEHICLES, TR AILERS, 18
AND SEMITRAILERS; AN D FOR OTHER PURPOSES . 19
20
21
Subtitle 22
TO INCREASE THE SALES AND USE TAX 23
EXEMPTION FOR USED MOTOR VEHICLES; AND TO 24
REPEAL THE SPECIAL RATE OF TAX FOR 25
CERTAIN USED MOTOR VEHICLES, TRAILERS, 26
AND SEMITRAILERS. 27
28
29
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 30
31
SECTION 1. The introductory language of Arkansas Code § 26 -52-301 is 32
amended to read as follows: 33
Except for food and food ingredients that are taxed under § 26-52-317 34
and except for used motor vehicles, trailers, and semitrailers that are taxed 35
under § 26-52-324, there is levied an excise tax of three percent (3%) upon 36 SB133
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the gross proceeds or gross receipts derived from all sales to any person of 1
the following: 2
3
SECTION 2. Arkansas Code § 26 -52-302 is amended to read as follows: 4
26-52-302. Additional taxes levied. 5
(a)(1) In addition to the excise tax levied upon the gross proceeds or 6
gross receipts derived from all sales by this chapter, except for food and 7
food ingredients that are taxed under § 26-52-317 and except for used motor 8
vehicles, trailers, and semitrailers that are taxed under § 26-52-324, there 9
is levied an excise tax of one percent (1%) upon all taxable sales of 10
property, specified digital products, digital codes, and services subject to 11
the tax levied in this chapter. 12
(2) This tax shall be collected, reported, and paid in the same 13
manner and at the same time as is prescribed by law for the collection, 14
reporting, and payment of all other Arkansas gross receipts taxes. 15
(3) In computing gross receipts or gross proceeds as defined in 16
§ 26-52-103, a deduction shall be allowed for bad debts resulting from the 17
sale of tangible personal property. 18
(b)(1) In addition to the excise tax levied upon the gross proceeds or 19
gross receipts derived from all sales by this chapter, except for food and 20
food ingredients that are taxed under § 26-52-317 and except for used motor 21
vehicles, trailers, and semitrailers that are taxed under § 26-52-324, there 22
is hereby levied an excise tax of one-half of one percent (0.5%) upon all 23
taxable sales of property, specified digital products, digital codes, and 24
services subject to the tax levied in this chapter. 25
(2) This tax shall be collected, reported, and paid in the same 26
manner and at the same time as is prescribed by law for the collection, 27
reporting, and payment of all other Arkansas gross receipts taxes. 28
(3) However, in computing gross receipts or gross proceeds as 29
defined in § 26-52-103, a deduction shall be allowed for bad debts resulting 30
from the sale of tangible personal property. 31
(c)(1) Except for food and food ingredients that are taxed under § 26-32
52-317 and except for used motor vehicles, trailers, and semitrailers that 33
are taxed under § 26-52-324, there is levied an additional excise tax of one-34
half of one percent (0.5%) upon all taxable sales of property, specified 35
digital products, digital codes, and services subject to the tax levied by 36 SB133
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this chapter. 1
(2) The tax shall be collected, reported, and paid in the same 2
manner and at the same time as is prescribed by this chapter, for the 3
collection, reporting, and payment of Arkansas gross receipts taxes. 4
(d)(1) Except for food and food ingredients that are taxed under § 26-5
52-317 and except for used motor vehicles, trailers, and semitrailers that 6
are taxed under § 26-52-324, there is levied an additional excise tax of 7
seven-eighths of one percent (0.875%) upon all taxable sales of property, 8
specified digital products, digital codes, and services subject to the tax 9
levied by this chapter. 10
(2) The tax shall be collected, reported, and paid in the same 11
manner and at the same time as prescribed by this chapter, for the 12
collection, reporting, and payment of Arkansas gross receipts taxes. 13
14
SECTION 3. Arkansas Code § 26 -52-324 is repealed. 15
26-52-324. Special tax rate for certain used motor vehicles, trailers, 16
and semitrailers. 17
(a) In lieu of the gross receipts or gross proceeds taxes levied u nder 18
§§ 26-52-301 and 26-52-302, there is levied an excise tax on the gross 19
receipts or gross proceeds derived from the sale of a used motor vehicle, 20
trailer, or semitrailer that has a sales price of at least four thousand 21
dollars ($4,000) but less than te n thousand dollars ($10,000) at the rate of 22
two and eight hundred seventy -five thousandths percent (2.875%). 23
(b) The tax levied in this section shall be in addition to: 24
(1) Any gross receipts or gross proceeds tax levied in the 25
Arkansas Constitution; 26
(2) Any gross receipts or gross proceeds tax levied by a 27
municipality or county; and 28
(3) Any additional gross receipts or gross proceeds tax levied 29
in an Arkansas city and resulting from an election within that city conducted 30
in accordance with §§ 26 -52-601 — 26-52-606. 31
(c) For the purpose of determining whether the tax levied by this 32
section applies to the sale of a used motor vehicle, trailer, or semitrailer, 33
the sales price for the used motor vehicle, trailer, or semitrailer shall not 34
be reduced by: 35
(1) The value of a motor vehicle, trailer or semitrailer traded 36 SB133
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in as part payment on the purchase price of the newly acquired motor vehicle, 1
trailer, or semitrailer; or 2
(2) The amount received by the purchaser for the sale of another 3
motor vehicle, trailer, or semitrailer. 4
(d) The revenues generated by the tax levied under this section shall 5
be distributed as follows: 6
(1) Seventy-six and six-tenths percent (76.6%) of the taxes, 7
interest, penalties, and costs received by the Secretary of the Department of 8
Finance and Administration under this section shall be deposited as general 9
revenues; 10
(2) Eight and five-tenths percent (8.5%) of the taxes, interest, 11
penalties, and costs received by the secretary under this section shall be 12
deposited into the Property Tax Relief Trust Fund; and 13
(3) Fourteen and nine -tenths percent (14.9%) of the taxes, 14
interest, penalties, and costs received by the secretary under this section 15
shall be deposited into the Educational Adequacy Fund. 16
(e) The excise tax levied under this section shall be collected and 17
paid in the same manner and at the same time as is prescribed in § 26 -52-510 18
for the collection and payment of gross receipts taxes on motor vehicles, 19
trailers, and semitrailers. 20
21
SECTION 4. Arkansas Code § 26-52-510(b)(1)(B), concerning the direct 22
payment of sales tax by consumer -users on new and used motor vehicles, 23
trailers, or semitrailers, is amended to read as follows: 24
(B)(i)(a) If the total consideration for the sale of the 25
new or used motor vehicle, a used trailer, or semitrailer is less than four 26
thousand dollars ($4,000), no tax is due. 27
(b) If the total consideration for the sale of 28
a new motor vehicle, used trailer, or semitrailer is four thousand dollars 29
($4,000) or more, the full gross receipts tax rate levied under this chapter 30
shall be levied and collected. 31
(ii) If the total consideration for the sale of a 32
used motor vehicle, trailer, or semitrailer is at least four thousand dollars 33
($4,000) but is less than ten thousand dollars ($10,000), the gross receipts 34
tax due shall be determined under § 26-52-324 no tax is due. 35
(iii) If the total consideration for the sale of a 36 SB133
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used motor vehicle, trailer, or semitrailer is ten thousand dollars ($10,000) 1
or more:, 2
(a) The exemption under subdivision 3
(b)(1)(B)(i)(a) of this section does not apply; 4
(b) The special tax rate provided in § 26-52-5
324 does not apply; and 6
(c) The the full gross receipts tax rate 7
levied under this chapter shall be levied and collected. 8
9
SECTION 5. Arkansas Code § 26 -53-106(a), concerning the imposition and 10
rate of the compensating use tax, is amended to read as follows: 11
(a) There is levied and there shall be collected from every person in 12
this state a tax or excise for the privilege of storing, using, distributing, 13
or consuming within this state tangible personal property, specified digital 14
products, a digital code, or a taxable service purchased for storage, use, 15
distribution, or consumption in this state at the rate of three percent (3%) 16
of the sales price of the tangible personal property, specified digital 17
products, digital code, or taxable service except for food and food 18
ingredients that are taxed under § 26-53-145 and except for used motor 19
vehicles, trailers, and semitrailers that are taxed under § 26-53-150. 20
21
SECTION 6. Arkansas Code § 26 -53-107 is amended to read as follows: 22
26-53-107. Additional taxes levied. 23
(a)(1) In addition to the excise tax levied upon the privilege of 24
storing, using, distributing, or consuming tangible personal property, 25
specified digital products, a digital code, and taxable services within this 26
state by this subchapter, there is levied an excise tax of one percent (1%) 27
upon all tangible personal property, specified digital products, digital 28
codes, and taxable services subject to the tax levied in this subchapter 29
except for food and food ingredients that are taxed under § 26-53-145 and 30
except for used motor vehicles, trailers, and semitrailers that are taxed 31
under § 26-53-150. 32
(2) The tax shall be collected, reported, and paid in the same 33
manner and at the same time as is prescribed by law for the collection, 34
reporting, and payment of state compensating taxes. 35
(b)(1) In addition to the excise tax levied upon the privilege of 36 SB133
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storing, using, distributing, or consuming tangible personal property, 1
specified digital products, a digital code, and taxable services within the 2
state by this subchapter, there is levied an excise tax of one-half of one 3
percent (0.5%) upon all tangible personal property, specified digital 4
products, digital codes, and taxable services subject to the tax levied in 5
this subchapter except for food and food ingredients that are taxed under § 6
26-53-145 and except for used motor vehicles, trailers, and semitrailers that 7
are taxed under § 26-53-150. 8
(2) The tax shall be collected, reported, and paid in the same 9
manner and at the same time as is prescribed by law for the collection, 10
reporting, and payment of Arkansas compensating taxes. 11
(c)(1) There is levied an additional excise tax of one-half of one 12
percent (0.5%) upon all tangible personal property, specified digital 13
products, digital codes, and taxable services subject to the tax levied by 14
this subchapter except for food and food ingredients that are taxed under § 15
26-53-145 and except for used motor vehicles, trailers, and semitrailers that 16
are taxed under § 26-53-150. 17
(2) The tax shall be collected, reported, and paid in the same 18
manner and at the same time as is prescribed by this subchapter for the 19
collection, reporting, and payment of Arkansas compensating taxes. 20
(d)(1) There is levied an additional excise tax of seven-eighths of 21
one percent (0.875%) upon all tangible personal property, specified digital 22
products, digital codes, and taxable services subject to the tax levied by 23
this subchapter except for food and food ingredients that are taxed under § 24
26-53-145 and except for used motor vehicles, trailers, and semitrailers that 25
are taxed under § 26-53-150. 26
(2) The tax shall be collected, reported, and paid in the same 27
manner and at the same time as is prescribed by this subchapter for the 28
collection, reporting, and payment of Arkansas compensating taxes. 29
30
SECTION 7. Arkansas Code § 26 -53-126(b)(2), concerning the payment and 31
collections of the compensating use tax on new and used motor vehicles, 32
trailers, or semitrailers, is amended to read as follows: 33
(2)(A)(i) If the total consideration for the sale of the new or 34
used motor vehicle, a used trailer, or semitrailer is less than four thousand 35
dollars ($4,000), no tax is due. 36 SB133
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(ii) If the total consideration for the sale of a 1
new motor vehicle, used trailer, or semitrailer is four thousand dollars 2
($4,000) or more, the full compensating use tax rate levied under this 3
chapter shall be levied and collected. 4
(B) If the total consideration for the sale of a used 5
motor vehicle, trailer, or semitrailer is at least four thousand dollars 6
($4,000) but is less than ten thousand dollars ($10,000), the compensating 7
use tax due shall be determined under § 26-53-150 no tax is due. 8
(C) If the total consideration for the sale of a used 9
motor vehicle, trailer, or semitrailer is ten thousand dollars ($10,000) or 10
more:, 11
(i) The exemption under subdivision (b)(2)(A)(i) of 12
this section does not apply; 13
(ii) The special tax rate provided in § 26-53-150 14
does not apply; and 15
(iii) The the full compensating use tax rate levied 16
under this chapter shall be levied and collected. 17
18
SECTION 8. Arkansas Code § 26 -53-150 is repealed. 19
26-53-150. Special tax rate for certain used motor vehicles, trailers, 20
and semitrailers. 21
(a)(1) In lieu of the compensating use taxes levied under §§ 26-53-106 22
and 26-53-107, there is levied an excise tax for the privilege of storing, 23
using, distributing, or consuming a used motor vehicle, trailer, or 24
semitrailer within this state if the sales price of the used motor vehicle, 25
trailer, or semitrailer is at least four thousand dollars ($4,000) but less 26
than ten thousand dollars ($10,000). 27
(2) The excise tax levied under subdivision (a)(1) of this 28
section is levied at the rate of two and eight hundred seventy -five 29
thousandths percent (2.8 75%) of the sales price of the used motor vehicle, 30
trailer, or semitrailer. 31
(b) The tax levied in this section shall be in addition to: 32
(1) Any compensating use tax levied in the Arkansas 33
Constitution; 34
(2) Any compensating use tax levied by a munic ipality or county; 35
and 36 SB133
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(3) Any additional compensating use tax levied in an Arkansas 1
city under § 26-52-607. 2
(c) For the purpose of determining whether the tax levied by this 3
section applies to the sale of a used motor vehicle, trailer, or semitrailer , 4
the sales price for the used motor vehicle, trailer, or semitrailer shall not 5
be reduced by: 6
(1) The value of a motor vehicle, trailer, or semitrailer traded 7
in as part payment on the purchase price of the newly acquired motor vehicle, 8
trailer, or semitrailer; or 9
(2) The amount received by the purchaser for the sale of another 10
motor vehicle, trailer, or semitrailer. 11
(d) The revenues generated by the tax levied under this section shall 12
be distributed as follows: 13
(1) Seventy-six and six-tenths percent (76.6%) of the taxes, 14
interest, penalties, and costs received by the Secretary of the Department of 15
Finance and Administration under this section shall be deposited as general 16
revenues; 17
(2) Eight and five-tenths percent (8.5%) of the taxes, interest, 18
penalties, and costs received by the secretary under this section shall be 19
deposited into the Property Tax Relief Trust Fund; and 20
(3) Fourteen and nine -tenths percent (14.9%) of the taxes, 21
interest, penalties, and costs received by the secreta ry under this section 22
shall be deposited into the Educational Adequacy Fund. 23
(e) The excise tax levied under this section shall be collected and 24
paid in the same manner and at the same time as is prescribed in § 26 -53-126 25
for the collection and payment o f compensating use taxes on motor vehicles, 26
trailers, and semitrailers. 27
28
SECTION 9. EFFECTIVE DATE. Sections 1-8 of this act are effective on 29
the first day of the calendar quarter following the effective date of this 30
act. 31
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