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Arkansas House Bill HB1857

Arkansas 2025 Regular Session

Arkansas House Bill HB1857 Compare Versions

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11 Stricken language would be deleted from and underlined language would be added to present law.
22 *JLL341* 03/19/2025 1:25:42 PM JLL341
33 State of Arkansas 1
44 95th General Assembly A Bill 2
55 Regular Session, 2025 HOUSE BILL 1857 3
66 4
77 By: Representatives L. Johnson, Henley 5
88 By: Senator J. Boyd 6
99 7
1010 For An Act To Be Entitled 8
1111 AN ACT TO AMEND THE LAW CONCERNING THE COLLECTION OF 9
1212 SALES AND USE TAX ON THE SALE OF A NEW OR USED 10
1313 MOTORBOAT; TO PROVIDE FOR THE DIRECT PAYMENT OF SALES 11
1414 AND USE TAX ON A MOTORBOAT SOLD BY A MOTORBOAT 12
1515 DEALER; AND FOR OTHER PURPOSES. 13
1616 14
1717 15
1818 Subtitle 16
1919 TO AMEND THE LAW CONCERNING THE 17
2020 COLLECTION OF SALES AND USE TAX ON THE 18
2121 SALE OF A NEW OR USED MOTORBOAT; AND TO 19
2222 PROVIDE FOR THE DIRECT PAYMENT OF SALES 20
2323 AND USE TAX ON A MOTORBOAT SOLD BY A 21
2424 MOTORBOAT DEALER. 22
2525 23
2626 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 24
2727 25
2828 SECTION 1. Arkansas Code Title 26, Chapter 52, Subchapter 5, is 26
2929 amended to add an additional section to read as follows: 27
3030 26-52-524. Direct payment of tax by consumer -user — New and used 28
3131 motorboats sold by motorboat dealer — Definitions. 29
3232 (a) As used in this section, "motorboat" means the same as defined in 30
3333 § 27-101-103. 31
3434 (b)(1)(A) On or before the time for applying for a certificate of 32
3535 number as prescribed by § 27 -101-304, a consumer shall pay to the Secretary 33
3636 of the Department of Finance and Administration the tax levied by this 34
3737 chapter and all other gross receipts taxes levied by the state with respect 35
3838 to the sale by a motorboat dealer of a new or used motorboat required to be 36 HB1857
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4141 numbered in this state. 1
4242 (B) The tax levied by this chapter or other gross receipts 2
4343 taxes levied by the state shall not be collected by the motorboat dealer. 3
4444 (2) The secretary shall require the payment of the taxes at the 4
4545 time of registration before issuing a certificate of number for the new or 5
4646 used motorboat. 6
4747 (3) If the consumer fails to pay the taxes when due: 7
4848 (A) There is assessed a penalty equal to ten percent (10%) 8
4949 of the amount of taxes due; and 9
5050 (B) The consumer shall pay to the secretary the penalty 10
5151 under subdivision (b)(3)(A) of this section and the taxes due before the 11
5252 secretary issues a certificate of number for the motorboat. 12
5353 (c)(1)(A) Except as provided in this section, when a used motorboat is 13
5454 taken in trade as a credit or part payment on the sale of a new or used 14
5555 motorboat by a motorboat dealer, the tax levied by this chapter and all other 15
5656 gross receipts taxes levied by the state shall be paid on the net difference 16
5757 between the total consideration for the new or used motorboat sold and the 17
5858 credit for the used motorboat taken in trade. 18
5959 (B)(i) When a used motorboat is sold by a consumer, rather 19
6060 than traded in as a credit or part payment on the sale of a new or used 20
6161 motorboat, and the consumer subsequently purchases a new or used motorboat of 21
6262 greater value from a motorboat dealer within sixty (60) days of the sale, the 22
6363 tax levied by this chapter and all other gross receipts taxes levied by the 23
6464 state shall be paid on the net difference between the total consideration for 24
6565 the new or used motorboat purchased subsequently and the amount received from 25
6666 the sale of the used motorboat sold in lieu of a trade -in. 26
6767 (ii)(a) Upon applying for a certificate of number 27
6868 for the new or used motorboat, a consumer claiming the deduction provided by 28
6969 subdivision (c)(1)(B)(i) of this section shall provide a bill of sale signed 29
7070 by all parties to the transaction that reflects the total consideration paid 30
7171 to the motorboat dealer for the motorboat. 31
7272 (b) A copy of the bill of sale shall be 32
7373 deposited with the Department of Finance and Administration at the time of 33
7474 application for a certificate of number for the new or used motorboat. 34
7575 (c) The deduction provided by this section 35
7676 shall not be allowed unless the taxpayer claiming the deduction provides a 36 HB1857
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7979 copy of a bill of sale signed by all parties to the transaction that reflects 1
8080 the total consideration paid to the motorboat dealer for the motorboat. 2
8181 (iii) If the taxpayer claiming the deduction 3
8282 provided in this section fails to provide a bill of sale signed by all 4
8383 parties to the transaction that reflects the total consideration paid to the 5
8484 motorboat dealer for the motorboat, tax shall be due on the total 6
8585 consideration paid for the new or used motorboat without any deduction for 7
8686 the value of the item sold. 8
8787 (2)(A)(i) When a motorboat dealer removes a motorboat from its 9
8888 inventory and the motorboat is used by the dealership as a service motorboat, 10
8989 the dealer shall obtain a certificate of number, register and obtain a 11
9090 certificate of title, and pay sales tax on the listed retail price of the new 12
9191 motorboat. 13
9292 (ii)(a) When the motorboat dealer returns the 14
9393 service motorboat to inventory as a used motorboat and replaces it with a new 15
9494 motorboat for dealership use as a service motorboat, the dealer shall pay 16
9595 sales tax on the difference between the listed retail price of the new 17
9696 service motorboat to be used by the dealership and the value of the used 18
9797 service motorboat being returned to inventory. 19
9898 (b) The value of the used service motorboat 20
9999 shall be the highest listed wholesale price reflected in the most current 21
100100 edition of a publication that is generally accepted by the motorboat industry 22
101101 as providing an accurate valuation of used motorboats. 23
102102 (B)(i) As used in this subsection, “service motorboat” 24
103103 means a motorboat driven exclusively by an employee of the dealership and 25
104104 used either to transport dealership customers or dealership parts and 26
105105 equipment. 27
106106 (ii) “Service motorboat” does not include a 28
107107 motorboat that is rented by the dealership, used as a demonstration 29
108108 motorboat, or used by a dealership employee for personal use. 30
109109 (d) All parts and accessories purchased by motorboat dealers for 31
110110 resale or used by motorboat dealers for the reconditioning or rebuilding of 32
111111 used motorboats intended for resale are exempt from gross receipts tax, 33
112112 provided that the motorboat dealer meets the requirements of § 26 -52-34
113113 401(12)(A) and applicable rules promulgated by the secretary. 35
114114 (e) This section does not repeal any exemption from this chapter. 36 HB1857
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117117 (f) A credit is not allowed for sales or use taxes paid to another 1
118118 state with respect to the purchase of a motorboat that first obtained a 2
119119 certificate of number or title by the purchaser in Arkansas. 3
120120 (g)(1)(A) Except as provided in subdivision (g)(1)(B) of this section, 4
121121 a motorboat dealer with a permit under § 27 -101-302(5) who has purchased a 5
122122 used motorboat may pay the applicable fees and apply for a certificate of 6
123123 number for the used motorboat for the sole purpose of obtaining a certificate 7
124124 of title to the used motorboat without payment of gross receipts tax. 8
125125 (B)(i) The sale of a motorboat from the original franchise 9
126126 dealer to any other dealer, person, corporation, or other entity other than a 10
127127 franchise dealer of the same make of motorboat and which sale is reflected on 11
128128 the statement of origin shall be subject to gross receipts tax. 12
129129 (ii) The motorboat shall be considered a used 13
130130 motorboat that shall have a registered certificate of number and be titled, 14
131131 and tax shall be paid at the time of application for a certificate of number. 15
132132 (2) If a certificate of number is issued for a motorboat under § 16
133133 27-101-302(5)(C), the used motorboat titled by a dealer under this subsection 17
134134 shall not be operated on the waters of this state unless there is displayed 18
135135 on the used motorboat the identifying certificate of number issued under § 19
136136 27-101-302(5)(C). 20
137137 (h)(1) For purposes of this section, the total consideration for a 21
138138 used motorboat shall be presumed to be the greater of the actual sales price 22
139139 as provided on the bill of sale, invoice, or financing agreement or the 23
140140 average loan value price of the motorboat as listed in the most current 24
141141 edition of a publication that is generally accepted by the industry as 25
142142 providing an accurate valuation of used motorboats. 26
143143 (2) If the published loan value exceeds the invoiced price, the 27
144144 taxpayer shall establish to the secretary's satisfaction that the price 28
145145 reflected on the invoice or other document is true and correct. 29
146146 (3) If the secretary determines that the invoiced price is not 30
147147 the actual selling price of the motorboat, the total consideration shall be 31
148148 the published loan value. 32
149149 33
150150 SECTION 2. Arkansas Code Title 26, Chapter 53, Subchapter 1, is 34
151151 amended to add an additional section to read as follows: 35
152152 26-53-151. Tax on new and used motorboats — Payment and collection — 36 HB1857
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155155 Definition. 1
156156 (a) As used in this section, "motorboat" means the same as defined in 2
157157 § 27-101-103. 3
158158 (b)(1) Upon applying for a certificate of number in this state, a new 4
159159 or used motorboat sold by a motorboat dealer located outside of the state and 5
160160 required to be registered with a certificate of number in this state is 6
161161 subject to the tax levied in this subchapter and all other use taxes levied 7
162162 by the state. 8
163163 (2)(A)(i) On or before the time for applying for a certificate 9
164164 of number as prescribed by § 27 -101-304, the applicant for a certificate of 10
165165 number for the motorboat shall pay the taxes to the Secretary of the 11
166166 Department of Finance and Administration. 12
167167 (ii) The tax levied by this chapter or other use 13
168168 taxes levied by the state shall not be collected by the motorboat dealer. 14
169169 (B) The secretary shall collect the taxes before issuing a 15
170170 certificate of number for the motorboat. 16
171171 (3) If the applicant for a certificate of number for a motorboat 17
172172 fails to pay the taxes when due: 18
173173 (A) There is assessed a penalty equal to ten percent (10%) 19
174174 of the amount of taxes due; and 20
175175 (B) The person making application for a certificate of 21
176176 number for a motorboat shall pay to the secretary the penalty under 22
177177 subdivision (b)(3)(A) of this section and the taxes due before the secretary 23
178178 issues a certificate of number for the motorboat. 24
179179 (c)(1) When a used motorboat is taken in trade as a credit or part 25
180180 payment on the sale of a new or used motorboat by a motorboat dealer located 26
181181 outside of the state, the tax levied in this subchapter and all other use 27
182182 taxes levied by the state shall be paid on the net difference between the 28
183183 total consideration for the new or used motorboat sold and the credit for the 29
184184 used motorboat taken in trade. 30
185185 (2)(A) When a used motorboat is sold by a consumer, rather than 31
186186 traded in as a credit or part payment on the sale of a new or used motorboat, 32
187187 and the consumer subsequently purchases a new or used motorboat of greater 33
188188 value from a motorboat dealer located outside of the state within sixty (60) 34
189189 days of the sale, the tax levied by this chapter and all other gross receipts 35
190190 taxes levied by the state shall be paid on the net difference between the 36 HB1857
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193193 total consideration for the new or used motorboat purchased subsequently and 1
194194 the amount received from the sale of the used motorboat sold in lieu of a 2
195195 trade-in. 3
196196 (B)(i) Upon applying for a certificate of number for the 4
197197 new or used motorboat, a consumer claiming the deduction provided by 5
198198 subdivision (c)(2)(A) of this section shall provide a bill of sale signed by 6
199199 all parties to the transaction that reflects the total consideration paid to 7
200200 the motorboat dealer for the motorboat. 8
201201 (ii) A copy of the bill of sale shall be deposited 9
202202 with the Department of Finance and Administration at the time of registration 10
203203 of the new or used motorboat. 11
204204 (iii) The deduction provided by this subdivision 12
205205 (c)(2) shall not be allowed unless the taxpayer claiming the deduction 13
206206 provides a copy of a bill of sale signed by all parties to the transaction 14
207207 that reflects the total consideration paid to the motorboat dealer for the 15
208208 motorboat. 16
209209 (C) If the taxpayer claiming the deduction provided in 17
210210 this subdivision (c)(2) fails to provide a bill of sale signed by all parties 18
211211 to the transaction that reflects the total consideration paid to the 19
212212 motorboat dealer for the motorboat, tax shall be due on the total 20
213213 consideration paid for the new or used motorboat without any deduction for 21
214214 the value of the item sold. 22
215215 (d) The tax imposed by this subchapter does not apply to a motorboat 23
216216 to be registered by a bona fide nonresident of this state. 24
217217 (e) This section does not repeal any exemption from this subchapter. 25
218218 (f)(1) Upon payment of all applicable fees, a motorboat dealer with a 26
219219 permit under § 27-101-302(5) who has purchased a used motorboat from outside 27
220220 of the state may apply for a certificate of number for the motorboat for the 28
221221 sole purpose of obtaining a certificate of title to the vehicle without 29
222222 payment of use tax. 30
223223 (2) If a certificate of number is issued for a motorboat under § 31
224224 27-101-302(5)(C), the used motorboat titled by a dealer under this subsection 32
225225 shall not be operated on the waters of this state unless there is displayed 33
226226 on the used motorboat the identifying certificate of number issued under § 34
227227 27-101-302(5)(C). 35
228228 (g)(1) For purposes of this section, the total consideration for a 36 HB1857
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231231 used motorboat shall be presumed to be the greater of the actual sales price 1
232232 as provided on a bill of sale, invoice, or financing agreement or the average 2
233233 loan value of the motorboat as listed in the most current edition of a 3
234234 publication which is generally accepted by the motorboat industry as 4
235235 providing an accurate valuation of used motorboats. 5
236236 (2) If the published loan value exceeds the invoiced price, the 6
237237 taxpayer shall establish to the secretary's satisfaction that the price 7
238238 reflected on the invoice or other document is true and correct. 8
239239 (3) If the secretary determines that the invoiced price is not 9
240240 the actual selling price of the motorboat, the total consideration shall be 10
241241 the published loan value. 11
242242 12
243243 SECTION 3. EFFECTIVE DATE. Sections 1 and 2 of this act are effective 13
244244 on the first day of the calendar quarter following the effective date of this 14
245245 act. 15
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