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HB 1970

TO AMEND THE LAW CONCERNING THE PREPAYMENT OF SALES TAX; AND TO INCREASE THE THRESHOLD FOR RETAILERS WHO ARE REQUIRED TO PREPAY SALES TAX.

2025 Regular Session Introduced by Howard Beaty and 1 co-sponsor

HB 1970 aimed to raise the sales tax prepayment threshold from $200,000 to $500,000, easing the tax burden on smaller Arkansas retailers and improving cash flow.

Died in House Committee at Sine Die adjournment.
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Bill Summary · HB 1970

Summary of House Bill 1970

Bill Number: HB 1970
Title: To Amend the Law Concerning the Prepayment of Sales Tax; and to Increase the Threshold for Retailers Who Are Required to Prepay Sales Tax
Status: Died in House Committee at Sine Die adjournment
Introduced: April 02, 2025
Classification: Bill

Purpose and Intent

House Bill 1970 aimed to amend existing laws regarding the prepayment of sales tax in Arkansas. The primary intent of the bill was to increase the threshold for retailers required to prepay sales tax, thereby potentially easing the tax burden on smaller retailers and streamlining the tax collection process.

Key Provisions

The bill proposed the following significant changes to Arkansas Code § 26-52-512(a):

  • Increased Sales Threshold: The average net sales threshold for retailers required to prepay sales tax would be raised from $200,000 to $500,000 per month. This change would exempt smaller retailers from the prepayment requirement, allowing them to manage their cash flow more effectively.

  • Prepayment Options: Retailers meeting the new threshold would still be required to make prepayments, but they would have two options for doing so:

    1. Two Payments Per Month: Retailers could make two electronic funds transfers each month, each equal to 40% of the tax due based on their monthly average net sales, due on the 12th and 24th of each month.
    2. Single Payment Option: Alternatively, retailers could opt to pay an amount equal to or exceeding 80% of their gross receipts tax liability by the 24th of the month, with the balance due when filing their monthly gross receipts tax report by the 20th of the following month.

Impact

  • Affected Parties: The bill would primarily affect retailers in Arkansas, particularly those with average net sales between $200,000 and $500,000 per month. By raising the threshold, smaller retailers would benefit from reduced compliance burdens.

  • Administrative Changes: The proposed changes aimed to simplify the tax payment process for qualifying retailers, potentially leading to improved cash flow management and reduced administrative costs associated with tax compliance.

Legislative Timeline

  • April 02, 2025: Bill filed.
  • April 03, 2025: Bill read for the first time, rules suspended, read a second time, and referred to the Committee on Revenue & Taxation - House.
  • May 05, 2025: Bill died in House Committee at Sine Die adjournment.

Conclusion

While HB 1970 sought to provide relief to smaller retailers by increasing the sales threshold for prepayment of sales tax, it ultimately did not progress beyond the committee stage. The proposed amendments reflected an effort to modernize tax compliance for Arkansas retailers, but the bill's failure to advance means that the existing laws remain unchanged.

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

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