HB1472
To Create A Sales And Use Tax Exemption For Parts Purchased To Repair Agricultural Equipment And Machinery And Timber Equipment And Machinery And Parts And Services Purchased To Repair A Grain Bin.
AI-Generated Summary
This Arkansas legislative bill, House Bill 1472, proposes to create new sales and use tax exemptions related to the agriculture and timber industries. Specifically, it aims to exempt from sales and use tax the purchase of parts intended for the repair of agricultural equipment and machinery. The bill also seeks to provide a similar exemption for parts used to repair timber equipment and machinery. Furthermore, it introduces an exemption for both parts and services required to repair grain bins. The proposed law defines "agricultural equipment and machinery" as implements used exclusively and directly in commercial agricultural production in Arkansas. Similarly, "timber equipment and machinery" is defined as implements used exclusively in the commercial production, harvesting, or processing of timber within the state. The effective date for Section 1 of this act is set for January 1, 2026. This legislation is sponsored by Representative Beaty Jr. and Senator Gilmore.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill would be individuals and businesses engaged in commercial agricultural production and timber production, harvesting, or processing within Arkansas. This includes farmers, ranchers, and timber companies who rely on specialized equipment for their operations. By exempting parts and services for repairs of agricultural and timber machinery, as well as grain bins, from sales and use taxes, these entities would experience a reduction in their operational costs. This financial relief could potentially allow for reinvestment in their businesses, improved equipment maintenance, or increased profitability.
Who Might Suffer?
The entities most directly negatively impacted by this bill would be the state government of Arkansas, specifically its revenue collection agencies. The creation of new sales and use tax exemptions means a decrease in the amount of tax revenue collected by the state. While the bill aims to support the agricultural and timber sectors, the reduction in tax income could potentially lead to a need for budget adjustments in other state programs or services funded by these tax revenues. The extent of this impact would depend on the volume of exempted transactions.