TO INCREASE THE SALES AND USE TAX EXEMPTION FOR USED MOTOR VEHICLES; AND TO AMEND THE REDUCED SALES AND USE TAX RATE APPLICABLE TO PURCHASES OF USED MOTOR VEHICLES.

Fiscal Impact Statement 95th General Assembly of the State of Arkansas Regular Session, 2025 ______________________________________________________________________________ DATE: 4/2/2025 BILL: SB82, As Engrossed: S4/1/25 SPONSOR: Sen. J. Payton SUBTITLE: TO INCREASE THE SALES AND USE TAX EXEMPTION FOR USED MOTOR VEHICLES; AND TO AMEND THE REDUCED SALES AND USE TAX RATE APPLICABLE TO PURCHASES OF USED MOTOR VEHICLES. ______________________________________________________________________________ TOPIC √ AMEND THE REDUCED SALES AND USE TAX RATE APPLICABLE TO PURCHASES OF USED MOTOR VEHICLES AFFECTED FUNDS √ General Revenue REVENUE IMPACT √ Estimated Dynamic Impact FY2026: Estimated reduction of 11.27 million dollars in State Revenue Collections FY2027: Estimated reduction of 17.15 million dollars in State Revenue Collections ASSUMPTIONS - BASED ON: √ Arkansas Department of Finance and Administration √ Regional Economic Models, Inc. ADDITIONAL COMMENTS Prepared by Fiscal Services Division, AR Bureau of Legislative Research

Fiscal Impact Statement Bill: SB82 Bill Subtitle: TO INCREASE THE SALES AND USE TAX EXEMPTION FOR USED MOTOR VEHICLES; AND TO AMEND THE REDUCED SALES AND USE TAX RATE APPLICABLE TO PURCHASES OF USED MOTOR VEHICLES. --------------------------------------------------------------------------------------------------------------------------------------- Sponsors: Sen. Payton Basic Change: Under SB82, the reduced sales and use tax rate of 3.5% would apply to the sale of a used motor vehicle having a sales price of at least $10,000 but less than $15,000. The 3.5% tax rate consists of the 2.875% statutory rate and the 0.625% sales and use taxes levied by Amendments 75 and 101 to the Arkansas Constitution for conservation and highways. SB82 increases the sales and use tax exemption on the sale of a used motor vehicle having a sales price of less than $4,000 to $10,000. The sale of a used vehicle having a sales price of $15,000 or more is subject to the full sales and use tax rate. Under current law, the sale of a used vehicle having a sales price of less than $4,000 is exempt from tax, the sale of a used vehicle with a sales price of at least $4,000 but less than $10,000 is subject to the r