Will Arkansas be first to slap trucking companies with back sales taxes?

| 8/1/2002

Will Arkansas be one of the first states to collect back taxes from trucking companies that can no longer register their trucks in Oklahoma to get a tax break? According to Lane Kidd, executive director of the Arkansas Trucking Association, Attorney General Mark Pryor has issued an opinion that says Arkansas, indeed, "can" collect back sales tax on a vehicle that was previously registered in Oklahoma.

"But Arkansas is not bound to do so by statute," Kidd said. "It is up to the Director of the Arkansas Department of Finance and Authority to set policy. So, Pryor's opinion is favorable in that nothing in state statute requires this action."

The issue arose after the International Registration Plan (IRP) challenged Oklahoma as third- party registrar. The state previously had allowed truckers to use third-party agents to establish residency in Oklahoma.

Thirty-eight states now provide either an exemption from sales tax, an apportioned sales tax, or a cap on sales tax for equipment used in interstate commerce. Arkansas repealed its sales tax in the early 1970s and now is only one of eight states that charges sales tax on such equipment.

According to Kidd, the back fees would be less a credit for the $10 excise tax Oklahoma charged.
-- Donna Carlson, staff writer