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HB 1594

TO CREATE A FARMER SALES TAX IDENTIFICATION CARD; AND TO RELIEVE A SELLER OF SALES TAX REMITTANCE LIABILITY UPON GOOD FAITH ACCEPTANCE OF A FARMER SALES TAX IDENTIFICATION CARD.

2025 Regular Session Introduced by Tyler Dees and 1 co-sponsor

HB 1594 creates a Farmer Sales Tax Identification Card in Arkansas, allowing eligible farmers to claim sales tax exemptions, reducing their costs and protecting retailers.

Notification that HB1594 is now Act 621
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WeVote Research Nonpartisan
Bill Summary · HB 1594

Summary of HB 1594: Farmer Sales Tax Identification Card

Purpose and Intent

House Bill 1594 (HB 1594) aims to establish a Farmer Sales Tax Identification Card in Arkansas. This card will allow eligible farmers to claim exemptions from sales tax when purchasing goods necessary for their farming operations. The bill also provides protection for sellers who accept this card in good faith, relieving them of liability for sales tax remittance.

Key Provisions

  • Creation of the Farmer Sales Tax Identification Card:

    • The card will be issued by the Arkansas Department of Finance and Administration (DFA) to individuals engaged in farming.
    • "Farming" is defined as the agricultural production of food, fiber, grass sod, or nursery products as a business.

  • Sales Tax Exemption:

    • Farmers can present the identification card to retailers to claim exemptions from sales tax on eligible purchases.
    • Retailers accepting the card in good faith are relieved from liability for collecting sales tax if the exemption is later deemed invalid.

  • Eligibility Criteria:

    • To qualify for the card, applicants must demonstrate they are engaged in farming and have the capacity to produce commercially marketable quantities of agricultural products.
    • Documentation may include tax forms or a business plan for those farming for less than three years.

  • Renewal and Fees:

    • The identification card will expire eight years from the date of issuance and can be renewed.
    • An application fee of $20 for new cards and $10 for renewals will be charged, with funds directed to the State Treasury.

  • Documentation and Compliance:

    • The DFA may request supporting documentation from farmers claiming exemptions.
    • If a purchase is later found to be ineligible for exemption, the department can assess taxes, interest, and penalties against the purchaser.

Impact

  • Who is Affected:

    • Farmers: Eligible farmers will benefit from tax exemptions, reducing their operational costs.
    • Retailers: Sellers will have a clear process for accepting tax-exempt purchases, with protections against liability when acting in good faith.

  • Fiscal Considerations:

    • The implementation of the card will require modifications to the Arkansas Integrated Revenue System (AIRS) at an estimated cost of $340,000, with annual maintenance costs of $20,000.
    • Additional staffing will be necessary within the DFA to process applications for the identification cards.

Procedural Aspects

  • Timeline:
    • HB 1594 was introduced on February 26, 2025, and has since passed through various legislative stages, culminating in its enactment as Act 621 on April 14, 2025.
    • The act is set to take effect on January 1, 2026.

Conclusion

HB 1594 represents a significant step towards supporting Arkansas farmers by providing a streamlined process for sales tax exemptions. By establishing the Farmer Sales Tax Identification Card, the legislation aims to ease the financial burden on farmers while ensuring compliance and protection for retailers.

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

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