Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 HOUSE BILL 1319 3
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By: Representatives Crawford, Barnes, S. Berry, Breaux, John Carr, C. Cooper, Duffield, Ennett, D. 5
Garner, Gonzales Worthen, Gramlich, Hollowell, Hudson, L. Johnson, Lynch, McClure, McCullough, M. 6
McElroy, McGruder, Nazarenko, J. Richardson, Richmond, Rose, Rye, Steimel 7
By: Senators J. Boyd, A. Clark 8
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For An Act To Be Entitled 10
AN ACT TO AMEND THE LAW CONCERNING TAX BENEFITS 11
PROVIDED TO DISABLED VETERANS; TO PROVIDE AN 12
EXEMPTION FROM STATE SALES TAX FOR DISABLED VETERANS, 13
SPOUSES OF DISABLED VETERANS, AND SURVIVING SPOUSES 14
OF DISABLED VETERANS; AND FOR OTHER PURPOSES. 15
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Subtitle 18
TO PROVIDE AN EXEMPTION FROM STATE SALES 19
TAX FOR DISABLED VETERANS, SPOUSES OF 20
DISABLED VETERANS, AND SURVIVING SPOUSES 21
OF DISABLED VETERANS. 22
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 24
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SECTION 1. Arkansas Code Title 26, Chapter 52, Subchapter 4, is 26
amended to add an additional section to read as follows: 27
26-52-457. Disabled veteran, spouse of disabled veteran, and surviving 28
spouse of disabled veteran. 29
(a) As used in this section, "disabled veteran" means a person who 30
qualifies for a property tax exemption under § 26 -3-306. 31
(b)(1) The gross receipts and gross proceeds derived from the sale of 32
tangible personal property, specified digital products, a digital code, or 33
services to a disabled veteran, a spouse of a disabled veteran, or a 34
surviving spouse of a disabled veteran if the surviving spouse has not 35
remarried are exempt from the gross receipts tax levied by this chapter. 36 HB1319
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(2) The exemption provided in this section: 1
(A) Applies only to sales made at a physical location in 2
the state; and 3
(B) Does not apply to: 4
(i) A sales and use tax levied by a local 5
government; or 6
(ii) The compensating use tax levied by the Arkansas 7
Compensating Tax Act of 1949, § 26 -53-101 et seq. 8
(c) To claim the exemption allowed under this section: 9
(1) A disabled veteran shall: 10
(A) Obtain an identification card from the Department of 11
Veterans Affairs; and 12
(B) Present the identification card obtained under 13
subdivision (c)(1)(A) of this section at the time of an exempt purchase; and 14
(2) The surviving spouse of a deceased disabled veteran shall 15
submit a letter to the Department of Finance and Administration from the 16
United States Department of Veterans Affairs certifying that he or she is the 17
unremarried surviving spouse of a disabled veteran. 18
(d)(1) The maximum amount that may be claimed in a calendar year by a 19
taxpayer as an exemption under this section is five thousand dollars 20
($5,000). 21
(2) The Department of Finance and Administration may request a 22
person claiming an exemption under this section to provide a statement 23
executed under oath that the amount of the exemption claimed under this 24
section has not exceeded the limitation provided in subdivision (d)(1) of 25
this section. 26
(3) If a taxpayer claiming an exemption under this section 27
exceeds the limitation provided in subdivision (d)(1) of this section, the 28
amount claimed as exempt in excess of the limitation shall be treated as a 29
direct sales tax liability, and the Department of Finance and Administration 30
may recover the sales tax, including any applicable penalties and interest, 31
by the use of any method authorized by law. 32
(e) A seller accepting an identification card under this section to 33
process an exempt transaction shall: 34
(1) Use the serial number on the identification card to process 35
the exempt transaction; and 36 HB1319
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(2) Include each serial number used under subdivision (e)(1) of 1
this section on the sales tax report submitted under this chapter. 2
(f)(1) The Department of Veterans Affairs, in coordination with the 3
Department of Finance and Administration, shall issue an identification card 4
to each eligible person who applies for an identification card under this 5
section. 6
(2) An identification card issued under this subsection shall 7
include without limitation: 8
(A) A photograph of the disabled veteran to whom the 9
identification card is issued; and 10
(B) A unique serial number for purposes of verifying the 11
exemption allowed under this section. 12
(g) A person who claims an exemption under this section with a purpose 13
to defraud upon conviction is guilty of a Class C misdemeanor. 14
(h) The Department of Veterans Affairs and the Department of Finance 15
and Administration shall: 16
(1) Adopt rules to implement and administer this section; and 17
(2) Collaborate to: 18
(A) Ensure the secure issuance of identification cards to 19
disabled veterans; and 20
(B) Manage the exemption provided under this section. 21
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SECTION 2. Arkansas Code § 26 -73-113(a)(1)(A), concerning the 23
alternative local sales and use tax, is amended to read as follows: 24
(a)(1)(A) In lieu of using all or a portion of its authority to levy a 25
sales and use tax solely to pay bonded debt under § 14 -164-327, the governing 26
body of any municipality or county may adopt an ordinance levying a tax in 27
the amount of one-fourth of one percent (0.25%), one -half of one percent 28
(0.5%), three-fourths of one percent (0.75%), or one percent (1%) upon all 29
taxable sales of property and services subject to the tax levied by the 30
Arkansas Gross Receipts Act of 1941, § 26 -52-101 et seq., upon the sales of 31
property and services exempt from the gross receipts tax under § 26 -52-457, 32
and upon the privilege of storing, using, distributing, or consuming within 33
this state any tangible personal property which is subject to the Arkansas 34
Compensating Tax Act of 1949, § 26 -53-101 et seq. The ordinance or ordinances 35
must specify that the tax is being levied under this law. 36 HB1319
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1
SECTION 3. Arkansas Code § 26 -74-212(a), concerning the applicability 2
of the county sales tax levied for capital improvements, is amended to read 3
as follows: 4
(a) A county sales tax levied under this subchapter or in § 26 -74-301 5
et seq. shall be applicable to sales of items and services sold by a 6
business, including items and services exempt from the Arkansas Gross 7
Receipts Act of 1941, § 26 -52-101 et seq., under § 26 -52-457, and the tax 8
shall be administered under the Arkansas Gross Receipts Act of 1941, § 26 -52-9
101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26 -53-101 et 10
seq. 11
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SECTION 4. Arkansas Code § 26 -74-312(b), concerning the administration 13
and collection of the county sales and use tax for capital improvements, is 14
amended to read as follows: 15
(b) In addition to the state gross receipts tax, the secretary shall 16
collect an additional tax under the authority of this subchapter on the gross 17
receipts from the sale of all items and services that are subject to the 18
Arkansas Gross Receipts Act of 1941, § 26 -52-101 et seq., and the Arkansas 19
Compensating Tax Act of 1949, § 26 -53-101 et seq., and all items and services 20
exempt from the Arkansas Gross Receipts Act of 1941, § 26 -52-101 et seq., 21
under § 26-52-457. 22
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SECTION 5. Arkansas Code § 26 -75-214(b), concerning the administration 24
and collection of the municipal sales and use tax for capital improvements, 25
is amended to read as follows: 26
(b) In addition to the state gross receipts tax and compensating tax, 27
the secretary shall collect an additional tax under the authority of this 28
subchapter on the receipts from the sale at retail or on the sale price or 29
lease or rental price on the storage, use, distribution, or other consumption 30
of all taxable items and services subject to the Arkansas Gross Receipts Act 31
of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, 32
§ 26-53-101 et seq., and all items and services exempt from the Arkansas 33
Gross Receipts Act of 1941, § 26 -52-101 et seq., under § 26 -52-457. 34
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SECTION 6. Arkansas Code § 26 -75-405(a), concerning the items subject 36 HB1319
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to the temporary municipal sales and use tax for the acquisition, 1
construction, or improvement of parks, is amended to read as follows: 2
(a) When any city or town levies a sales and use tax pursuant to the 3
authority granted in this subchapter, the tax shall be levied upon the same 4
sales and the same items and services as are subject to taxation under the 5
Arkansas Gross Receipts Act of 1941, § 26 -52-101 et seq., and the Arkansas 6
Compensating Tax Act of 1949, § 26 -53-101 et seq., and upon the items and 7
services exempt from the Arkansas Gross Receipts Act of 1941, § 26 -52-101 et 8
seq., under § 26-52-457. 9
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SECTION 7. Arkansas Code § 26 -75-502(a), concerning the authority to 11
levy a municipal gross receipts tax, is amended to read as follows: 12
(a) Any city of the first class or city of the second class having a 13
population of not more than forty thousand (40,000) persons according to the 14
most recent federal census and that has been or may in the future be 15
designated as a model city under the Demonstration Cities and Metropolitan 16
Development Act of 1966, 42 U.S.C. § 3301 et seq., by an ordinance passed by 17
its governing body, may levy a tax for the benefit of the city of not to 18
exceed one percent (1%) on gross proceeds or gross receipts derived from 19
sales, as such sales and gross proceeds or gross receipts are defined in the 20
Arkansas Gross Receipts Act of 1941, § 26 -52-101 et seq., and the Arkansas 21
Compensating Tax Act of 1949, § 26 -53-101 et seq., and on sales of property 22
and services exempt from the Arkansas Gross Receipts Act of 1941, § 26 -52-101 23
et seq., under § 26-52-457. 24
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SECTION 8. Arkansas Code § 26 -81-104(a)(1), concerning the amount of a 26
tax levied under the Multicounty Airport and Riverport Financing Act, is 27
amended to read as follows: 28
(a)(1) Any tax levied pursuant to the authority of this chapter shall 29
be a tax equal to one percent (1%) on the sales price on items of personal 30
property and services sold or to be used in the levying county to the extent 31
of and subject to the exemptions with respect to the gross receipts tax and 32
compensating use tax as set forth in the Arkansas Gross Receipts Act of 1941, 33
§ 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26 -53-34
101 et seq., respectively , except that personal property and services exempt 35
from the Arkansas Gross Receipts Act of 1941, § 26 -52-101 et seq., under § 36 HB1319
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26-52-457 are subject to the tax levied under this section . 1
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SECTION 9. Arkansas Code § 26 -82-102(9), concerning the definitions to 3
be used under the Local Sales and Use Tax Economic Development Project 4
Funding Act, is amended to read as follows: 5
(9) “Local sales and use tax” means a tax levied under this 6
chapter on the gross proceeds or gross receipts derived from sales within a 7
city or county of all items that are : subject 8
(A) Subject to taxation under the Arkansas Gross Receipts 9
Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 10
1949, § 26-53-101 et seq.; and 11
(B) Exempt from the Arkansas Gross Receipts Act of 1941, § 12
26-52-101 et seq., under § 26 -52-457; 13
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SECTION 10. DO NOT CODIFY. EFFECTIVE DATE. Sections 1-9 of this act 15
are effective on the first day of the calendar quarter following the 16
effective date of this act. 17
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