Arkansas House passes tax amnesty; bill heads to Senate

By Mark Reddig, associate editor | 2/3/2003
The Arkansas House of Representatives passed HB1030, which would give truckers who live in the state but base plate elsewhere a chance to come home without going broke. HB1030 would cap the state sales tax at $1,000 for a truck and $500 for a trailer. The bill also contains a clause that would grant a tax “amnesty” to homebound truckers who would otherwise have to pay big bucks in back taxes, penalties and interest for base-plating out of state in the past. The bill passed the House Wednesday by a vote of 84-13 with only one member abstaining. The bill had received support from a variety of groups and individuals, including The Arkansas Highway Commission; the state Chamber of Commerce; a number of independent trucking companies and owners; the Arkansas Association of Counties; the Arkansas Trucking Association; and the Arkansas Municipal League. Hearings for the bill were packed with owner-operators and others from the trucking industry. The bill now moves onto the Senate for consideration, where one of its chief sponsors, Rep. Don House (D-Walnut Ridge), said it was expected to pass. It will be guided through the upper chamber by Sen. Jerry Bookout, D-Jonesboro. The bill has 13 sponsors already in the Senate, where only 18 votes are needed to pass a bill. However, despite its wide support, the measure isn't out of the woods yet. The Arkansas Democrat-Gazette reported Jan. 29 that the bill could face court challenges. “Some attorney ... is going to file suit, and this thing will be declared unconstitutional," Rep. Steve Napper, D-Little Rock, told the newspaper. “Trucking companies are going to owe three to seven years back tax.” The bill's opponents contend the amnesty provision of HB1030 violates Article 12, Section 12 of the Arkansas Constitution, which bans forgiving corporate debt without payment, The Democrat-Gazette reported. In addition, the state's Department of Finance and Administration, which had opposed the measure and which contends that base plating out of state is illegal for Arkansas residents, says the bill will cost the state millions in taxes. Supporters say the state is not collecting the money now – as a result of the current setup, only 8 percent of the 83,000 large trucks whose owners are residents of Arkansas register their vehicles in that state. For semi-trailers, the figure is even lower – 2 percent. The trucking industry employs more than 110,000 people in the state. "We're using the simple mathematical equation of bringing a lot back and taxing them less, and in the long-run collecting more money," Rep. House said.