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HB 1671

Virginia Real Estate Time-Share Act; recordkeeping by resellers.

2025 Regular Session Introduced by Tommy Wright

Establishes a statewide sales tax exemption for qualified small nonprofit organizations (under $200,000 budget, 501c3) on sales to them, with certification and enforcement rules.

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Bill Summary · HB 1671

Summary — HB 1671 (Arkansas, 95th General Assembly, 2025)

Note: The package of documents supplied includes multiple unrelated drafts from other states and conflicting metadata (including an initial title about bonds for a greenhouse). This summary focuses on the Arkansas HB 1671 materials provided, which propose a sales & use tax exemption for certain small nonprofit organizations.

Main purpose

Create a statewide general sales and use tax exemption for “qualified nonprofit organizations” to reduce the tax burden on small, community-based 501(c)(3) nonprofits in Arkansas.

Key provisions

  • Adds a new section to Arkansas Code (Title 26, Ch. 52, Subch. 4) creating an exemption from the gross receipts (sales) tax and compensating use tax for sales made to “qualified nonprofit organizations.”
  • Definition of “qualified nonprofit organization”:
    • Is exempt under 26 U.S.C. §501(c)(3) as of January 1, 2025;
    • Has an annual operating budget of less than $200,000; and
    • Performs charitable, community‑based services in Arkansas for residents in need.
  • Exempt transactions: gross receipts from sales of tangible personal property, specified digital products/digital codes, and services sold to a qualified nonprofit are exempt (subject to exclusions).
  • Property exclusions: the exemption does not apply to sales of certain items, including motor vehicles, motorboats, aircraft, alcoholic beverages, tobacco, computers, construction materials, household appliances, mobile/cellular phones, all‑terrain vehicles, and televisions.
  • Application / certification:
    • Nonprofits must apply to the Secretary of the Department of Finance and Administration (DFA) using a DFA-prescribed form.
    • DFA must respond in writing by issuing an exemption certificate or denying the application (with reasons).
    • DFA may revoke certificates if an organization no longer qualifies.
    • DFA may promulgate implementing rules, including a reverification process.
    • Secretary must report annually to the Legislative Council on the number of exemption certificates issued.
  • Effective date: the first day of the calendar quarter following the act’s effective date.

Fiscal and administrative impacts

  • Revenue: DFA estimates an undetermined reduction in sales and use tax collections (loss depends on utilization).
  • Implementation costs:
    • IT changes to Arkansas Taxpayer Access Point (ATAP) and processes: ~$36,000.
    • Personnel to administer and reverify applications: estimated $235,406 annually (two fiscal support analysts and two tax auditors).
  • Time: DFA indicated adequate time for implementation but noted need to update computer programs, websites, and training.

Legal/compliance issue

  • Earlier DFA analysis noted draft language limiting the exemption to transactions of $2,000 or less. That threshold may violate the Streamlined Sales and Use Tax Agreement (SSUTA), which prohibits exemptions or caps based on the value of a transaction or item. DFA recommended removing any $2,000 limitation to comply with SSUTA. The final bill text as provided appears to omit the explicit $2,000 cap, but the record contains inconsistent references.

Who is affected

  • Beneficiaries: small Arkansas 501(c)(3) nonprofits with budgets under $200,000 that provide community-based charitable services.
  • Vendors: sellers will need procedures to accept exemption certificates; some product sales remain taxable due to enumerated exclusions.
  • State government: DFA for administration and oversight; state treasury for reduced tax receipts.

Procedural / status notes

  • The supplied materials include amendments, DFA fiscal impact statements, and administrative comments. The file also contains legislative timelines and entries from other jurisdictions sharing the HB 1671 number, producing conflicting status records. The Arkansas version includes amendment activity and an effective-date provision; DFA actions and rulemaking would follow enactment. If a $2,000 transaction cap remains or reappears, the state may need to revise language to remain consistent with SSUTA obligations.

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

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