SB134
To Increase The Sales And Use Tax Exemption For Used Motor Vehicles; And To Amend The Reduced Sales And Use Tax Rate Applicable To Purchases Of Used Motor Vehicles.
Last Action (May 1, 2023): Sine Die adjournment
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AI-Generated Summary
Senate Bill 134 aims to reduce the tax burden on Arkansas residents purchasing used motor vehicles by expanding sales and use tax exemptions and adjusting tax rates. Currently, used vehicle sales under $4,000 are exempt from sales and use tax, while those between $4,000 and $10,000 qualify for a reduced excise tax rate. The bill raises the tax-free exemption threshold for used motor vehicles to include those valued under $10,000. Additionally, it extends the application of the reduced excise tax rate (2.875%) to used motor vehicles valued between $10,000 and $15,000. For vehicles priced at $15,000 or more, the full gross receipts tax rate remains in effect. The stated legislative intent is to help working Arkansans with limited income afford reliable transportation necessary for daily living.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries are individuals with limited incomes who purchase used motor vehicles priced between $4,000 and $15,000. By increasing the exemption threshold and expanding the eligibility for the reduced excise tax rate, these buyers will face lower upfront costs when purchasing essential personal transportation.
Who Might Suffer?
The primary entity negatively impacted is the State of Arkansas, as the bill will result in a decrease in total state and local tax revenue collected from sales and use taxes on used motor vehicles. Local governments that rely on these tax receipts for funding public services may experience a budgetary reduction.
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