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 1857 3
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By: Representatives L. Johnson, Henley 5
By: Senator J. Boyd 6
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For An Act To Be Entitled 8
AN ACT TO AMEND THE LAW CONCERNING THE COLLECTION OF 9
SALES AND USE TAX ON THE SALE OF A NEW OR USED 10
MOTORBOAT; TO PROVIDE FOR THE DIRECT PAYMENT OF SALES 11
AND USE TAX ON A MOTORBOAT SOLD BY A MOTORBOAT 12
DEALER; AND FOR OTHER PURPOSES. 13
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Subtitle 16
TO AMEND THE LAW CONCERNING THE 17
COLLECTION OF SALES AND USE TAX ON THE 18
SALE OF A NEW OR USED MOTORBOAT; AND TO 19
PROVIDE FOR THE DIRECT PAYMENT OF SALES 20
AND USE TAX ON A MOTORBOAT SOLD BY A 21
MOTORBOAT DEALER. 22
23
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 5, is 26
amended to add an additional section to read as follows: 27
26-52-524. Direct payment of tax by consumer -user — New and used 28
motorboats sold by motorboat dealer — Definitions. 29
(a) As used in this section, "motorboat" means the same as defined in 30
§ 27-101-103. 31
(b)(1)(A) On or before the time for applying for a certificate of 32
number as prescribed by § 27 -101-304, a consumer shall pay to the Secretary 33
of the Department of Finance and Administration the tax levied by this 34
chapter and all other gross receipts taxes levied by the state with respect 35
to the sale by a motorboat dealer of a new or used motorboat required to be 36 HB1857
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numbered in this state. 1
(B) The tax levied by this chapter or other gross receipts 2
taxes levied by the state shall not be collected by the motorboat dealer. 3
(2) The secretary shall require the payment of the taxes at the 4
time of registration before issuing a certificate of number for the new or 5
used motorboat. 6
(3) If the consumer fails to pay the taxes when due: 7
(A) There is assessed a penalty equal to ten percent (10%) 8
of the amount of taxes due; and 9
(B) The consumer shall pay to the secretary the penalty 10
under subdivision (b)(3)(A) of this section and the taxes due before the 11
secretary issues a certificate of number for the motorboat. 12
(c)(1)(A) Except as provided in this section, when a used motorboat is 13
taken in trade as a credit or part payment on the sale of a new or used 14
motorboat by a motorboat dealer, the tax levied by this chapter and all other 15
gross receipts taxes levied by the state shall be paid on the net difference 16
between the total consideration for the new or used motorboat sold and the 17
credit for the used motorboat taken in trade. 18
(B)(i) When a used motorboat is sold by a consumer, rather 19
than traded in as a credit or part payment on the sale of a new or used 20
motorboat, and the consumer subsequently purchases a new or used motorboat of 21
greater value from a motorboat dealer within sixty (60) days of the sale, the 22
tax levied by this chapter and all other gross receipts taxes levied by the 23
state shall be paid on the net difference between the total consideration for 24
the new or used motorboat purchased subsequently and the amount received from 25
the sale of the used motorboat sold in lieu of a trade -in. 26
(ii)(a) Upon applying for a certificate of number 27
for the new or used motorboat, a consumer claiming the deduction provided by 28
subdivision (c)(1)(B)(i) of this section shall provide a bill of sale signed 29
by all parties to the transaction that reflects the total consideration paid 30
to the motorboat dealer for the motorboat. 31
(b) A copy of the bill of sale shall be 32
deposited with the Department of Finance and Administration at the time of 33
application for a certificate of number for the new or used motorboat. 34
(c) The deduction provided by this section 35
shall not be allowed unless the taxpayer claiming the deduction provides a 36 HB1857
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copy of a bill of sale signed by all parties to the transaction that reflects 1
the total consideration paid to the motorboat dealer for the motorboat. 2
(iii) If the taxpayer claiming the deduction 3
provided in this section fails to provide a bill of sale signed by all 4
parties to the transaction that reflects the total consideration paid to the 5
motorboat dealer for the motorboat, tax shall be due on the total 6
consideration paid for the new or used motorboat without any deduction for 7
the value of the item sold. 8
(2)(A)(i) When a motorboat dealer removes a motorboat from its 9
inventory and the motorboat is used by the dealership as a service motorboat, 10
the dealer shall obtain a certificate of number, register and obtain a 11
certificate of title, and pay sales tax on the listed retail price of the new 12
motorboat. 13
(ii)(a) When the motorboat dealer returns the 14
service motorboat to inventory as a used motorboat and replaces it with a new 15
motorboat for dealership use as a service motorboat, the dealer shall pay 16
sales tax on the difference between the listed retail price of the new 17
service motorboat to be used by the dealership and the value of the used 18
service motorboat being returned to inventory. 19
(b) The value of the used service motorboat 20
shall be the highest listed wholesale price reflected in the most current 21
edition of a publication that is generally accepted by the motorboat industry 22
as providing an accurate valuation of used motorboats. 23
(B)(i) As used in this subsection, “service motorboat” 24
means a motorboat driven exclusively by an employee of the dealership and 25
used either to transport dealership customers or dealership parts and 26
equipment. 27
(ii) “Service motorboat” does not include a 28
motorboat that is rented by the dealership, used as a demonstration 29
motorboat, or used by a dealership employee for personal use. 30
(d) All parts and accessories purchased by motorboat dealers for 31
resale or used by motorboat dealers for the reconditioning or rebuilding of 32
used motorboats intended for resale are exempt from gross receipts tax, 33
provided that the motorboat dealer meets the requirements of § 26 -52-34
401(12)(A) and applicable rules promulgated by the secretary. 35
(e) This section does not repeal any exemption from this chapter. 36 HB1857
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(f) A credit is not allowed for sales or use taxes paid to another 1
state with respect to the purchase of a motorboat that first obtained a 2
certificate of number or title by the purchaser in Arkansas. 3
(g)(1)(A) Except as provided in subdivision (g)(1)(B) of this section, 4
a motorboat dealer with a permit under § 27 -101-302(5) who has purchased a 5
used motorboat may pay the applicable fees and apply for a certificate of 6
number for the used motorboat for the sole purpose of obtaining a certificate 7
of title to the used motorboat without payment of gross receipts tax. 8
(B)(i) The sale of a motorboat from the original franchise 9
dealer to any other dealer, person, corporation, or other entity other than a 10
franchise dealer of the same make of motorboat and which sale is reflected on 11
the statement of origin shall be subject to gross receipts tax. 12
(ii) The motorboat shall be considered a used 13
motorboat that shall have a registered certificate of number and be titled, 14
and tax shall be paid at the time of application for a certificate of number. 15
(2) If a certificate of number is issued for a motorboat under § 16
27-101-302(5)(C), the used motorboat titled by a dealer under this subsection 17
shall not be operated on the waters of this state unless there is displayed 18
on the used motorboat the identifying certificate of number issued under § 19
27-101-302(5)(C). 20
(h)(1) For purposes of this section, the total consideration for a 21
used motorboat shall be presumed to be the greater of the actual sales price 22
as provided on the bill of sale, invoice, or financing agreement or the 23
average loan value price of the motorboat as listed in the most current 24
edition of a publication that is generally accepted by the industry as 25
providing an accurate valuation of used motorboats. 26
(2) If the published loan value exceeds the invoiced price, the 27
taxpayer shall establish to the secretary's satisfaction that the price 28
reflected on the invoice or other document is true and correct. 29
(3) If the secretary determines that the invoiced price is not 30
the actual selling price of the motorboat, the total consideration shall be 31
the published loan value. 32
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SECTION 2. Arkansas Code Title 26, Chapter 53, Subchapter 1, is 34
amended to add an additional section to read as follows: 35
26-53-151. Tax on new and used motorboats — Payment and collection — 36 HB1857
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Definition. 1
(a) As used in this section, "motorboat" means the same as defined in 2
§ 27-101-103. 3
(b)(1) Upon applying for a certificate of number in this state, a new 4
or used motorboat sold by a motorboat dealer located outside of the state and 5
required to be registered with a certificate of number in this state is 6
subject to the tax levied in this subchapter and all other use taxes levied 7
by the state. 8
(2)(A)(i) On or before the time for applying for a certificate 9
of number as prescribed by § 27 -101-304, the applicant for a certificate of 10
number for the motorboat shall pay the taxes to the Secretary of the 11
Department of Finance and Administration. 12
(ii) The tax levied by this chapter or other use 13
taxes levied by the state shall not be collected by the motorboat dealer. 14
(B) The secretary shall collect the taxes before issuing a 15
certificate of number for the motorboat. 16
(3) If the applicant for a certificate of number for a motorboat 17
fails to pay the taxes when due: 18
(A) There is assessed a penalty equal to ten percent (10%) 19
of the amount of taxes due; and 20
(B) The person making application for a certificate of 21
number for a motorboat shall pay to the secretary the penalty under 22
subdivision (b)(3)(A) of this section and the taxes due before the secretary 23
issues a certificate of number for the motorboat. 24
(c)(1) When a used motorboat is taken in trade as a credit or part 25
payment on the sale of a new or used motorboat by a motorboat dealer located 26
outside of the state, the tax levied in this subchapter and all other use 27
taxes levied by the state shall be paid on the net difference between the 28
total consideration for the new or used motorboat sold and the credit for the 29
used motorboat taken in trade. 30
(2)(A) When a used motorboat is sold by a consumer, rather than 31
traded in as a credit or part payment on the sale of a new or used motorboat, 32
and the consumer subsequently purchases a new or used motorboat of greater 33
value from a motorboat dealer located outside of the state within sixty (60) 34
days of the sale, the tax levied by this chapter and all other gross receipts 35
taxes levied by the state shall be paid on the net difference between the 36 HB1857
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total consideration for the new or used motorboat purchased subsequently and 1
the amount received from the sale of the used motorboat sold in lieu of a 2
trade-in. 3
(B)(i) Upon applying for a certificate of number for the 4
new or used motorboat, a consumer claiming the deduction provided by 5
subdivision (c)(2)(A) of this section shall provide a bill of sale signed by 6
all parties to the transaction that reflects the total consideration paid to 7
the motorboat dealer for the motorboat. 8
(ii) A copy of the bill of sale shall be deposited 9
with the Department of Finance and Administration at the time of registration 10
of the new or used motorboat. 11
(iii) The deduction provided by this subdivision 12
(c)(2) shall not be allowed unless the taxpayer claiming the deduction 13
provides a copy of a bill of sale signed by all parties to the transaction 14
that reflects the total consideration paid to the motorboat dealer for the 15
motorboat. 16
(C) If the taxpayer claiming the deduction provided in 17
this subdivision (c)(2) fails to provide a bill of sale signed by all parties 18
to the transaction that reflects the total consideration paid to the 19
motorboat dealer for the motorboat, tax shall be due on the total 20
consideration paid for the new or used motorboat without any deduction for 21
the value of the item sold. 22
(d) The tax imposed by this subchapter does not apply to a motorboat 23
to be registered by a bona fide nonresident of this state. 24
(e) This section does not repeal any exemption from this subchapter. 25
(f)(1) Upon payment of all applicable fees, a motorboat dealer with a 26
permit under § 27-101-302(5) who has purchased a used motorboat from outside 27
of the state may apply for a certificate of number for the motorboat for the 28
sole purpose of obtaining a certificate of title to the vehicle without 29
payment of use tax. 30
(2) If a certificate of number is issued for a motorboat under § 31
27-101-302(5)(C), the used motorboat titled by a dealer under this subsection 32
shall not be operated on the waters of this state unless there is displayed 33
on the used motorboat the identifying certificate of number issued under § 34
27-101-302(5)(C). 35
(g)(1) For purposes of this section, the total consideration for a 36 HB1857
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used motorboat shall be presumed to be the greater of the actual sales price 1
as provided on a bill of sale, invoice, or financing agreement or the average 2
loan value of the motorboat as listed in the most current edition of a 3
publication which is generally accepted by the motorboat industry as 4
providing an accurate valuation of used motorboats. 5
(2) If the published loan value exceeds the invoiced price, the 6
taxpayer shall establish to the secretary's satisfaction that the price 7
reflected on the invoice or other document is true and correct. 8
(3) If the secretary determines that the invoiced price is not 9
the actual selling price of the motorboat, the total consideration shall be 10
the published loan value. 11
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SECTION 3. EFFECTIVE DATE. Sections 1 and 2 of this act are effective 13
on the first day of the calendar quarter following the effective date of this 14
act. 15
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