Bill
HB 1804
Arkansas bill would exempt vegetation line management services (in substations/rights-of-way) from sales tax, lowering costs for utilities and reducing state/local tax receipts.
Note on sources and conflicts
- The materials provided include multiple, conflicting entries labeled “HB 1804” (an Arkansas bill addressing sales-tax treatment of vegetation management and an unrelated Illinois bill). This summary focuses on the substantive Arkansas bill text and the Department of Finance and Administration (DFA) fiscal analysis included in the packet, which supply the clearest legislative content. The packet’s top-line “Bill Information” (an appropriation for Tishomingo County) appears inconsistent with the detailed documents and is not reflected in the DFA/legal text below.
Purpose and intent
- To amend Arkansas sales and use tax law to exempt certain utility vegetation line management services from gross receipts (sales) tax. The exemption targets services performed in substations or on utility distribution/transmission easements or rights-of-way to ensure those vegetation-management activities are not taxed.
Key provisions
- Adds a new subdivision to Ark. Code § 26-52-301(3)(B) to exempt “vegetation line management services” when performed by mechanical or manual means in a substation, utility distribution or transmission line easement, or right-of-way.
- Defines “brush” as trimmings from a tree or a woody species that would grow into a tree if left to grow.
- Enumerates covered services (including, without limitation):
- Tree and brush trimming or removal from floors, side walls, overheads, or structures;
- Easement or right-of-way clearing;
- Tree/brush/wood-waste/debris removal or disposal (mulching, chipping, shredding, brush-hogging, mowing, stump grinding, hauling, pickup);
- Chemical or herbicide application or spraying (including stump and vine treatment);
- Trimming vines or vegetation from utility structures (power/gas lines, posts, poles, guy wires, braces, meters, conductors).
- Effective date: the first day of the calendar quarter following the act’s effective date.
Fiscal impact (DFA estimates)
- Estimated state sales and use tax revenue loss:
- FY2026 (estimated effective date 10/1/2025; 8 months of impact): approximately −$2,438,459 total.
- FY2027 (full year): approximately −$3,767,418 total.
- The DFA provided breakdowns by state and local funds (e.g., General Revenue ~4.5% share). Local city/county losses are also estimated (FY2027 local loss ≈ −$1,858,557).
- Method: national estimated spending on vegetation management scaled to Arkansas land area.
- Administrative impact: minor — updates to department websites and training materials recommended; no large resource needs.
Who is affected
- Utilities and contractors performing vegetation line management in substations, easements, and rights-of-way — they (and their customers) would no longer pay sales/use tax on these specified services.
- State and local governments — reduced sales tax receipts per the DFA estimates.
Procedural status
- Sponsors: Rep. Ray and Sen. J. Petty (primary); materials also list Rep. Bob Morgan in a separate Illinois bill entry.
- The Bill Information header shows status “Died In Committee.” Legislative-action items in the packet are inconsistent across jurisdictions; based on the Bill Information provided by the user, this Arkansas bill did not advance out of committee.
Other notes
- DFA legal analysis suggests a technical drafting improvement: add the exemption under § 26-52-301(3)(D)(ii) rather than § 26-52-301(3)(B).
- The packet contains an unrelated Illinois HB1804 text; that material is not part of the Arkansas measure summarized above.
Compiled from official sources — confirm details with the bill’s official record.
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