Bill > HB1960

This bill modifies several sections of Arkansas law to address how leased motor vehicles are treated for tax assessment and collection purposes. For motor vehicle leases longer than 30 days, the bill defines the lessee (the person leasing the vehicle) as the "owner" for property tax and sales tax purposes. This means lessees will be responsible for assessing the vehicle's value, paying property taxes, and handling sales tax calculations. The bill also clarifies how sales and use taxes should be calculated for leased vehicles with periodic payments, allowing tax collectors to either apply the tax to the first payment or distribute it evenly across all payments, while still maintaining the existing $2,500 cap on taxable value for motor vehicles, aircraft, watercraft, and certain types of homes. The changes will take effect for property tax assessment years beginning January 1, 2025, and for sales tax purposes on the first day of the calendar quarter following the bill's approval, effectively shifting more tax responsibilities directly to vehicle lessees.

Budget and Finance

https://arkleg.state.ar.us/Bills/Detail?id=hb1960&ddBienniumSession=2025%2F2025R