SPECIAL REPORT: Arkansas House to vote Wednesday on truck sales tax cap, amnesty

| 1/29/2003

A bill designed to help Arkansas truckers who are base-plated out-of-state is headed for a vote on the floor of the state House of Representatives today (Jan. 29), according to Rep. Don House (D-Walnut Ridge), one of the bill's chief sponsors.

HB1030 would cap the sales tax at $1,000 for a truck and $500 for a trailer, and 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 Arkansas House of Representatives will vote on the measure at 1:30 p.m. CST. Rep. House said that the bill now has 44 sponsors, and 49 votes in the House; to pass, it needs only 51 votes.

However, he said, "We are not expecting it to be that close; we are expecting a good margin."

Press reports had said the bill was off the table last week. But Rep. House told Land Line the bill was amended Jan. 23 in the Revenue and Tax Committee to clear up some of its wording - specifically involving reciprocal action among Arkansas, Oklahoma and the IRP - and is back on track.

That committee passed the bill 13-4 on Tuesday, Jan. 28, in the face of two competing bills and opposition from the Department of Finance and Administration.

Rep. House took the committee vote as a good sign.

"All along we have felt better about it getting out of the House than out of the Revenue and Tax Committee," he said. "And we survived Revenue and Tax well."

Arkansas is one of only seven states that charge truckers the full amount of sales tax on tractors and trailers, according to the bill's sponsors.

In September, Lane Kidd of the Arkansas Trucking Association said that under the previous rules, the owner of a truck could register a truck and trailer in Arkansas and pay $6,380 in sales tax, or he or she could register in a state like Oklahoma and pay a $51 charge for excise tax, title and lien fees. Many Arkansas truck owners had base plated in neighboring Oklahoma. 

"Legislation has been unfriendly to the trucking industry for the last 40 years," House said. "And yet we're the cradle of the trucking industry."

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.

Officials at the state's Department of Finance and Administration said it was illegal for Arkansas truckers to base plate in Oklahoma in the first place, citing a law that says if you are a resident of Arkansas, you must register in Arkansas.

The Revenue and Tax Committee heard testimony from a number of trucking and business interests during its hearing Jan. 28.

"We had a big outpouring of truckers from across the state," House said. "They filled the room standing room only."

The crowd included a significant number of owner-operators, Rep. House said, "all of them wearing red stickers that said 'Bring Our Truckers Home, HB1030.'"

Groups that testified in favor of the measure at the Jan. 28 hearing included: 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.

The highway department, cities and counties were supporting the bill, House said, because a second measure intended to solve the sales tax problem would take money from those entities. HB1030, he said, did not.

"My bill protects all those entities," he said, "as well as giving truckers a larger break than the other bill does."

House said HB1030 was developed with help from individual tractor-trailer owners, trucking firms, committees, associations, experts and others from the trucking industry.

"From one truck guys, to three and five truck companies, to companies that have a thousand or more trucks - It is the only bill we've been able to come up with that universally the trucking firms of all sizes have said, 'We can come back to Arkansas with this bill,'" House said. "It puts us in parity with at least 43 other states."

Previously, the bill had specified an amnesty for truckers who were base plated elsewhere between 1995 and this year. The dates were dropped from the most recent version on the advice of regulatory attorneys.

"We should not paint the state into a corner like that," House said. "When you start setting dates and guidelines, then a court might change those. So it's better just to say they don't owe it (back taxes), and let that be it."

The bill will be carried into the Arkansas Senate by Sen. Jerry Bookout, D-Jonesboro, Rep. House said. HB1030 has 13 sponsors already in the Senate, where only 18 votes are needed to pass a bill.

--By Mark H. Reddig, associate editor