No sales tax, no fuel-tax increase in Arkansas

By David Tanner, associate editor

Buyers of new Class 6 and 7 trucks in Arkansas will not pay the state sales and use tax on that equipment.

The tax exemption for trucks weighing between 68,001 and 73,280 pounds took effect July 1 as an extension to a law passed this past year. To qualify, trucks must be licensed under the International Registration Plan.

Purchasers of new equipment will reap the savings, but the tax break will cost the state transportation department an estimated $4 million in revenue.

Earlier this year, the state Senate attempted to repeal the exemption but the bill did not get enough votes. The Arkansas House passed a resolution in February to delay implementation until next year, but the effort did not survive in the Senate.

The Arkansas Trucking Association supported the tax exemption in exchange for supporting a proposed ballot measure that would have increased the state’s diesel tax by 5 cents per gallon.

Lawmakers promoted the tax on truckers to pay for highway improvements.

According to the Arkansas Trucking Association’s website, the carrier group withdrew its support for the extra tax on diesel because it had “no chance of adoption.” The group continues to support the exemption for equipment purchases.

During the debate leading up to the possible ballot issue, OOIDA issued a statement against the extra trucker tax, saying it was unfair to put the burden of paying for roads solely on truckers.

After much political wrangling, the diesel-tax increase ended up dying on the vine and never made it to the ballot.

A separate ballot question to fund highways through bonds succeeded, however, adding $575 million to state coffers while rendering the diesel-tax increase unnecessary.

Arkansas last increased the fuel tax by 4 cents in 1999. The Natural State currently levies a diesel tax of 22.5 cents at the pump. LL