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HB 1857

TO AMEND THE LAW CONCERNING THE COLLECTION OF SALES AND USE TAX ON THE SALE OF A NEW OR USED MOTORBOAT; AND TO PROVIDE FOR THE DIRECT PAYMENT OF SALES AND USE TAX ON A MOTORBOAT SOLD BY A MOTORBOAT DEALER.

2025 Regular Session Introduced by Justin Boyd and 2 co-sponsors

HB 1857 proposed direct sales tax payments by consumers for motorboats, shifting tax collection from dealers to buyers, impacting compliance and dealer processes in Arkansas.

WITHDRAWN BY AUTHOR
0
WeVote Research Nonpartisan
Bill Summary · HB 1857

Summary of House Bill 1857

Bill Information

  • Bill Number: HB 1857
  • Title: To Amend the Law Concerning the Collection of Sales and Use Tax on the Sale of a New or Used Motorboat; and to Provide for the Direct Payment of Sales and Use Tax on a Motorboat Sold by a Motorboat Dealer.
  • Status: Withdrawn by Author
  • Introduced: March 19, 2025
  • Classification: Bill

Purpose and Intent

House Bill 1857 aimed to amend existing laws regarding the collection of sales and use tax specifically for the sale of new and used motorboats in Arkansas. The bill proposed a system for direct payment of sales and use tax by consumers at the time of registration, rather than through motorboat dealers.

Key Provisions

The bill included several significant provisions:

  1. Direct Payment of Tax:

    • Consumers would be required to pay the sales and use tax directly to the Secretary of the Department of Finance and Administration before applying for a certificate of number for the motorboat.
    • Motorboat dealers would not collect the tax on behalf of the state.

  2. Penalties for Non-Payment:

    • A penalty of 10% would be assessed on any taxes not paid by the due date, which must be settled before a certificate of number is issued.

  3. Tax Calculation on Trade-Ins:

    • When a used motorboat is traded in, the tax would be calculated on the net difference between the sale price of the new motorboat and the trade-in value.
    • If a consumer sells a used motorboat and then purchases a new one within 60 days, they could claim a deduction based on the sale price of the used motorboat.

  4. Service Motorboats:

    • Provisions were included for motorboats used by dealerships as service boats, detailing how sales tax would be applied when these boats are registered and returned to inventory.

  5. Exemptions:

    • Parts and accessories purchased by motorboat dealers for resale or reconditioning would be exempt from gross receipts tax, provided certain conditions are met.

  6. No Credit for Out-of-State Taxes:

    • The bill specified that no credit would be allowed for sales or use taxes paid to other states for motorboats that are registered in Arkansas.

Impact

If enacted, HB 1857 would have primarily affected:
- Consumers: They would be responsible for direct tax payments, potentially simplifying the process but also placing the onus of tax compliance on them.
- Motorboat Dealers: Dealers would no longer collect sales tax, which could alter their sales processes and customer interactions.
- State Revenue: The bill aimed to streamline tax collection but could impact the timing and method of revenue generation for the state.

Procedural Aspects

  • Legislative Timeline:
    • March 19, 2025: The bill was filed and read for the first time.
    • March 19, 2025: Rules were suspended, and it was read a second time before being referred to the Committee on Revenue & Taxation - House.
    • April 14, 2025: The bill was withdrawn by the author.

In summary, HB 1857 sought to reform the sales tax collection process for motorboats in Arkansas, emphasizing direct consumer payment and altering the role of motorboat dealers in tax collection. However, the bill was ultimately withdrawn before further legislative action could take place.

Compiled from official sources — confirm details with the bill’s official record.

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