Arkansas lawmakers consider tax break for off-road diesel

| Thursday, September 14, 2006

A group of lawmakers in Arkansas are developing plans to offer a sales tax break on fuel costs from certain industries in the state. Over-the-road truck drivers wouldn’t benefit from the talks.

Democratic gubernatorial candidate Mike Beebe and Republican opponent Asa Hutchinson have added their names to the list of people who want to give users of off-road diesel in the state a break on fuel costs. Farmers, road crews, construction companies and timber haulers would be in line to benefit, the Arkansas News Bureau reported.

Supporters say the break is needed to give farmers and other off-road diesel users a break from prices that have nearly tripled in the past two years.

State Rep. Travis Boyd, D-Piggott, a farmer and co-chairman of the House and Senate Interim Committees on Agriculture, Forestry and Economic Development, touted the plan as a way to aid a major industry in the state.

The agriculture industry generates more than $13 billion into the state’s economy annually, Boyd told the News Bureau.

Boyd said one proposal drawing consideration would charge the sales tax on half of the off-road, or dyed, diesel purchased. He said the tax break is similar to one recently approved in Missouri for farmers.

Another proposal being discussed would remove the sales tax and instead charge a special fee on each gallon of off-road diesel. The fee would remain the same despite fluctuations in the per-gallon price, the News Bureau reported.

One other option would combine a sales tax cut and a small fee.

The 6-cent-per-gallon sales tax on off-road diesel accounts for about $40 million annually.

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