HB1235
To Create An Exemption From Sales Tax For All Purchases By A Nonprofit That Works With Arkansas Citizens Who Have Been Diagnosed With A Developmental Disability Or Developmental Delay.
Last Action (May 1, 2023): Died in House Committee at Sine Die Adjournment
Sponsors
AI-Generated Summary
House Bill 1235 creates a state sales and compensating use tax exemption for nonprofit organizations that provide services to Arkansas residents diagnosed with a developmental disability or developmental delay. To qualify for the exemption, eligible nonprofits must apply for and receive certification from the Arkansas Department of Finance and Administration. The bill clearly defines 'diagnosed with a developmental disability or developmental delay' to include conditions such as intellectual disabilities, cerebral palsy, epilepsy, spina bifida, Down syndrome, and autism, provided they originated before age 22 and result in substantial functional impairment. It also encompasses developmental delays in areas such as physical, cognitive, language, psychosocial, and self-help development. The exemption applies to the gross receipts or proceeds from the sale of tangible personal property or services purchased by certified nonprofits. The act is set to take effect on the first day of the calendar quarter following its enactment.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries are nonprofit organizations that provide support services to individuals with developmental disabilities or delays, as they will lower their operational costs by eliminating sales tax on their purchases. Additionally, the individuals with developmental disabilities or delays served by these organizations benefit indirectly, as the cost savings may allow nonprofits to expand their programs, improve service quality, or provide more resources to their clients.
Who Might Suffer?
The primary entity negatively impacted is the State of Arkansas, which will experience a reduction in general sales and use tax revenue. To the extent that these tax revenues fund public services and programs, a decrease in collections could potentially limit the state's budget flexibility for other public expenditures.
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