HB1506
To Create A Sales And Use Tax Exemption For Parts Purchased To Repair Agricultural Equipment And Machinery And Timber Equipment And Machinery.
Last Action (May 1, 2023): Died in House Committee at Sine Die Adjournment
Sponsors
AI-Generated Summary
House Bill 1506 proposes to create a sales and use tax exemption for parts purchased to repair agricultural and timber equipment and machinery in Arkansas. The bill defines agricultural equipment as implements used exclusively and directly in commercial agricultural production, and timber equipment as implements used exclusively in the commercial production, harvesting, or processing of timber. Under this legislation, the gross receipts or proceeds from the sale of parts used to repair this machinery would be exempt from the state's gross receipts tax and the compensating use tax. The bill specifies that this exemption applies to repairs made either in whole or in part to existing equipment. The provisions of this act are scheduled to take effect on January 1, 2024.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries are commercial farmers, ranchers, and timber operators in Arkansas who utilize machinery in their production processes. By exempting repair parts from sales and use taxes, these businesses will experience reduced overhead costs associated with maintaining essential operational equipment.
Who Might Suffer?
The state government and local jurisdictions that rely on sales tax revenue for their budgets would be negatively impacted by this bill. Because the exemption reduces the total taxable base for transactions involving agricultural and timber equipment parts, the state would experience a decrease in tax collections, potentially limiting funds available for public services and government operations.
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