HB1702
To Amend The Sales And Use Tax Exemptions For Certain Machinery And Equipment Used In Manufacturing; And To Provide A Sales And Use Tax Exemption For Machinery And Equipment Used In Closed-loop Recycling.
Last Action (May 5, 2025): Died in House Committee at Sine Die adjournment.
Sponsors
AI-Generated Summary
House Bill 1702 seeks to amend Arkansas state law regarding sales and use tax exemptions for machinery and equipment used in manufacturing. Specifically, the bill expands existing exemptions to include machinery and equipment used for mechanical recycling within a closed-loop circular process. The legislation defines a closed-loop circular process as one where reclaimed post-use materials are converted and reintroduced into the original manufacturing cycle to become components of a finished product. The bill outlines specific criteria for qualifying equipment, including systems used for gathering, transporting, converting, and conveying materials. These changes apply to both state sales tax and use tax exemptions. The act is set to become effective on the first day of the calendar quarter following its enactment.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries are manufacturing companies operating in Arkansas that utilize closed-loop recycling processes. By exempting the necessary machinery and equipment from sales and use taxes, these businesses will experience reduced capital expenditure costs, potentially encouraging investment in more efficient, circular production methods and sustainable internal waste management practices.
Who Might Suffer?
The primary group negatively impacted is the state government of Arkansas, which will experience a reduction in sales and use tax revenue as a result of the expanded exemptions. Additionally, other taxpayers might indirectly bear the burden if the state decides to offset this loss of revenue through other tax increases or budget cuts to public services.
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