Bill > HB1594

This bill creates a new "Farmer Sales Tax Identification Card" system to help farmers obtain sales tax exemptions more easily while providing clear guidelines for sellers and the Department of Finance and Administration. The bill defines an "eligible farmer" as someone engaged in agricultural production who can demonstrate the capacity to produce food, fiber, grass sod, or nursery products commercially, and who can provide either tax documentation from the past three years or a comprehensive business plan for new farmers. The new identification card will be valid for eight years and requires an application fee ($20 for new cards, $10 for renewals), with collected fees supporting administrative costs. Sellers who accept these identification cards in good faith will be relieved of sales tax liability if a purchaser improperly claims an exemption, provided the seller has not fraudulently avoided tax collection. The Department of Finance and Administration can request additional documentation from farmers using these cards and can assess taxes, interest, and penalties if an exemption is found to be improper. The bill aims to streamline the sales tax exemption process for farmers while maintaining accountability and providing clear standards for both farmers and sellers. The new system will take effect on January 1, 2026.

Budget and Finance

https://arkleg.state.ar.us/Bills/Detail?id=hb1594&ddBienniumSession=2025%2F2025R