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Bill

HB 1738

TO PROVIDE A SALES AND USE TAX EXEMPTION FOR DISABLED VETERANS.

2025 Regular Session Introduced by Glenn Barnes and 26 co-sponsors

HB 1738 aimed to exempt disabled veterans from state sales tax on purchases up to $25,000 yearly, providing financial relief for their service-related challenges.

Died in House Committee at Sine Die adjournment.
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WeVote Research Nonpartisan
Bill Summary · HB 1738

Summary of House Bill 1738: Sales and Use Tax Exemption for Disabled Veterans

Bill Overview

  • Bill Number: HB 1738
  • Title: To Provide a Sales and Use Tax Exemption for Disabled Veterans
  • Status: Died in House Committee at Sine Die adjournment
  • Introduced: March 11, 2025

Purpose and Intent

House Bill 1738 aimed to establish a sales and use tax exemption for purchases made by disabled veterans and certain authorized household members. The intent was to provide financial relief to disabled veterans, recognizing their service and the challenges they face.

Key Provisions

  • Definition of Disabled Veteran: The bill defined a "disabled veteran" as someone who qualifies for a property tax exemption under Arkansas law, specifically those awarded special monthly compensation by the U.S. Department of Veterans Affairs (DVA) for severe disabilities.

  • Exemption Details:

    • Eligible purchases would be exempt from state sales and use tax, with a maximum exemption limit of $25,000 per year for each disabled veteran.
    • Authorized household members could also make tax-exempt purchases on behalf of the disabled veteran.

  • Claiming the Exemption:

    • To claim the exemption, disabled veterans were required to submit a certification letter from the DVA to the Arkansas Department of Finance and Administration (DFA) and obtain an exemption identification card.
    • Each authorized household member would also need to obtain a card before making tax-exempt purchases.

  • Compliance and Penalties:

    • The DFA could request a sworn statement from the taxpayer to ensure compliance with the $25,000 limit.
    • Any fraudulent claims could result in a Class C misdemeanor charge.

  • Implementation: The DFA was tasked with creating rules and procedures to administer the exemption, including the issuance of exemption cards.

Fiscal Impact

  • The estimated fiscal impact for the state was significant:

    • FY2026: Approximately $19.2 million loss in state sales and use tax revenue.
    • FY2027: Estimated loss increased to $29.7 million.

  • The bill would also affect local city and county sales and use tax revenues, with projected losses of around $9.8 million in FY2026.

Resources Required

  • Implementation costs were estimated at $340,000 for programming the Arkansas Integrated Revenue System (AIRS) to create the exemption card, with an annual maintenance cost of $20,000.
  • Additional staffing would be necessary to manage the new exemption program.

Procedural Aspects

  • The bill was filed and referred to the House Committee on Revenue & Taxation on March 11, 2025.
  • It ultimately died in committee on May 5, 2025, and did not progress to a vote.

Conclusion

While HB 1738 sought to provide meaningful tax relief to disabled veterans in Arkansas, it did not advance past the committee stage. The proposed exemption highlighted the state's recognition of the sacrifices made by veterans and aimed to alleviate some financial burdens associated with their disabilities.

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

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