Arkansas House defeats second truck sales tax bill

| Tuesday, March 04, 2003

HB1130, a bill in the Arkansas General Assembly that would exempt commercial vehicles from the state sales tax, has been defeated in the House.

In a 53-50 vote Feb. 27, the House killed the measure, which was introduced by Rep. Jeff Gillespie, D-Danville. Even though it received a majority of votes, the Arkansas Constitution requires it and other bills regarding tax and fee increases to pass by a three-quarters vote.

However, according to the General Assembly Web site, Rep. Denny Sumpter, D-West Memphis, has given notice he will try to have the vote reconsidered.

The bill would have exempted commercial vehicles from the state sales tax, but they would still have been subject to city and county sales taxes, which are capped. The bill would have also increased the registration fee on tractor-trailers and other commercial vehicles, according to Rep. Jeff Gillespie, D-Danville, the bill’s primary sponsor.

Up till now, the state sales tax applied to the entire purchase price of a truck, often leaving truckers with bills in the thousands. Few states charge sales tax on tractor-trailers at that level.

In part because of the tax, only 8 percent of the more than 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.

The bill isn’t the only measure on the table in Arkansas to aid truckers there.

HB1030 would cap the sales tax on trucks bought or sold in the state to only the first $1,000 from the sale of a truck and only the first $500 from the sale of a trailer. Rep. Don House, D-Walnut Ridge, that bill’s primary sponsor, said that under current rates, the bill would cap the state sales tax on a truck at $51.25 and on a trailer at $25.63.

House described his and Gillespie’s bills as “competing measures.” HB1030 is before the Senate Revenue and Taxation Committee.

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