Now that Oklahoma has changed its rules to stop allowing out-of-state carriers to register there through third-party services, trucking companies in adjacent Arkansas are asking state officials to change sales tax laws.
According to the Arkansas Democrat-Gazette, a joint meeting of the Senate and House interim committees on public transportation heard testimony from trucking industry representatives that about 90 percent of Arkansas’ for-hire motor carriers register in other states because of Arkansas’ high sales tax laws. This means Arkansas is losing out on revenues, they said, and because Arkansas carriers can no longer use third-party agents to register equipment in Oklahoma if they don’t have a facility there, it could mean some trucking companies going out of business or leaving the state.
Lane Kidd, president of the Arkansas Trucking Assn., said Arkansas had “some of the most regressive and highest taxes in the nation.”
The Arkansas Office of Motor Vehicles says companies seeking to register in Arkansas will have to pay sales tax on purchases from the last three years if they registered in Oklahoma but lacked a facility there. Arkansas’ sales tax is 5.125 percent, not counting additional city or county taxes. Oklahoma only charges a $10 excise tax per piece of equipment. Kidd says that Arkansas is one of only 12 states to charge trucking companies the full sales tax. The remaining 38 provide a sales tax exemption, an apportioned sales tax or a cap on sales tax.
Kidd would like to see the state recognize the excise tax that carriers paid in Oklahoma, allowing them to register in Arkansas and pay sales tax for only the current year, plus long-term tax reform.
According to the Arkansas Democrat-Gazette, a joint meeting of the Senate and House interim committees on public transportation heard testimony from trucking industry representatives that about 90 percent of Arkansas’ for-hire motor carriers register in other states because of Arkansas’ high sales tax laws. This means Arkansas is losing out on revenues, they said, and because Arkansas carriers can no longer use third-party agents to register equipment in Oklahoma if they don’t have a facility there, it could mean some trucking companies going out of business or leaving the state.
Lane Kidd, president of the Arkansas Trucking Assn., said Arkansas had “some of the most regressive and highest taxes in the nation.”
The Arkansas Office of Motor Vehicles says companies seeking to register in Arkansas will have to pay sales tax on purchases from the last three years if they registered in Oklahoma but lacked a facility there. Arkansas’ sales tax is 5.125 percent, not counting additional city or county taxes. Oklahoma only charges a $10 excise tax per piece of equipment. Kidd says that Arkansas is one of only 12 states to charge trucking companies the full sales tax. The remaining 38 provide a sales tax exemption, an apportioned sales tax or a cap on sales tax.
Kidd would like to see the state recognize the excise tax that carriers paid in Oklahoma, allowing them to register in Arkansas and pay sales tax for only the current year, plus long-term tax reform.
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