Two similar House bills have been introduced in the Arkansas legislature to eliminate the sales tax on farm equipment parts. NAEDA strongly supports exempting farm equipment parts from the gross receipts tax levied in Arkansas.
Looking at both bills, there are a couple key differences that make House Bill 1472, sponsored by Representative Beaty (R) and Senator Gilmore (R), the better bill. The main reason is how each bill defines parts. HB 1472 has a definition of parts that includes forestry equipment within the scope of the exemption and includes “Parts purchased to repair, either in whole or in part, existing agricultural equipment and machinery or timber equipment and machinery.”
The other bill, HB 1464, includes parts “purchased to modify, replace, or repair, in whole or in part, existing agricultural equipment and machinery.” We find the modification language problematic and the bill excludes forestry machinery from the exemption.
Both bills have been referred to the House Committee on Revenue and Taxation. They are currently waiting for a fiscal analysis before being given a hearing. NAEDA has submitted our position statement supporting HB 1472 to the bill sponsors and committee members. We will keep you updated when the bill is scheduled for a hearing and provide information on how you can voice your support for the bill.
If you have any questions or concerns about this legislation or other issues before the legislature, please contact me directly.
