006.05.06 Ark. Code R. 005-GR-34

Current through Register Vol. 49, No. 10, October, 2024

Rule 006.05.06-005-GR-34 - EXEMPTIONS FROM TAX - MOTOR VEHICLES PURCHASED BY SPECIFIC INDIVIDUALS AND ORGANIZATIONS

A. The gross receipts or gross proceeds derived from sales of motor vehicles licensed for use on the highway and motor vehicle adaptive equipment to disabled veterans who have purchased the vehicles or the equipment with the financial aid of the United States Department of Veterans Affairs pursuant to the provisions of 38 U.S.C. §§ 1901-1905 are exempt from the tax. An official letter from the United States Department of Veterans Affairs verifying this fact will be accepted as proof of entitlement to this exemption.

B. Gross receipts and gross proceeds derived from the sale of new automobiles to a veteran of the United States Armed Services who is blind as the result of a service connected injury shall be exempt from the Arkansas Gross Receipts Tax. This exemption shall apply only to those persons who furnish the Department with a statement from the United States Department of Veterans Affairs certifying that such individual is a veteran of the United States Armed Services and has been blinded as the result of a service connected injury. This statement shall be supplied to the Department upon application for a vehicle license. This exemption shall be available only on the gross receipts or gross proceeds derived from the sale of one (1) new or used automobile every two (2) years to a veteran who complies with the requirements of this Section. As used herein, "automobile" means a passenger automobile or pickup truck but does not include trucks with a maximum gross load in excess of three-quarters of a ton and does not include any trailer.

C. The gross receipts or gross proceeds derived from the sale of school buses to school districts in Arkansas are exempt from the tax. Similarly, the gross receipts or gross proceeds derived from the sale of school buses to private school bus operators are exempt from the tax if all of the following criteria are satisfied:

1. At the time of the bus purchase, the private school bus operator has already contracted with an Arkansas school district to provide school bus services to students within the district;

2. The school buses purchased by the private school bus operator will be used solely and exclusively to transport the school district's students as required under the contract;

3. The school district is obligated under the terms of the contract to pay any taxes related to the school buses; and

4. The buses must be equipped with flashing white strobe lights and bus mounted "crossing gates" as required under Ark. Code Ann. § 6-19-117.

D. The gross receipts or gross proceeds derived from the sale of motor vehicles licensed for use on the highways for use exclusively by volunteer crews or squads for life saving, first aid or other rescue activities, including volunteer fire departments, are exempt from tax if the following conditions are satisfied:

1. The person, firm, or corporation desiring to claim this exemption shall obtain an application for registration and license from the Office of Motor Vehicle Registration, Division of Revenue, Arkansas Department of Finance and Administration. The application must be completed and submitted to that office along with the filing fee.

2. The vehicle must be painted a distinguishing color and must have conspicuously displayed thereon in letters and figures not less than three inches tall the identity of the volunteer life saving or first aid crew or rescue squad using such vehicle.

E. The gross receipts or gross proceeds derived from the sale of motor vehicles to municipalities, public school districts, and state supported colleges and universities within Arkansas are exempt from the tax, whether the vehicles are required to be licensed for highway use or not. The gross receipts or gross proceeds derived from the sale of a motor vehicle to a state supported vocational-technical school, technical college or community college located within Arkansas shall be exempt from the tax if such motor vehicle is to be used solely and exclusively for "training purposes" by the school or college. The term "training purposes" means that the motor vehicle must be used as an instructional or educational tool rather than for the school or college's transportation needs. For example, a motor vehicle purchased by a vocational-technical school exclusively for use in its automobile repair courses would qualify for the exemption. However, if the motor vehicle is used by the same school to transport students, staff, faculty or administrators, the tax exemption would not apply.

F. The gross receipts or gross proceeds derived from the sale of new motor vehicles which are purchased by non-profit organizations and used for the performance of contracts with the Department of Human Services ("DHS") or purchased with Urban Mass Transit Funds, are exempt from gross receipts tax if the following conditions are met:

1. Ten (10) or more vehicles are purchased at the same time for a fleet price;

2. The vehicles meet or exceed applicable state purchasing law specifications; and

3. The vehicles are used for transportation under DHS programs for the aging, disabled, mentally ill, or children and family services.

G.

1. Vehicles that must be licensed for use on the highway include: passenger cars, trucks, semi-trucks, buses, motorcycles as defined in Ark. Code Ann. § 27-20101, school buses, ambulances, hearses, and motor homes.

2. Vehicles that do not have to be licensed include: special mobile equipment as defined in Ark. Code Ann. Ann. § 27-14-211 (farm tractors, road construction and maintenance equipment, ditch-digging and well-boring equipment, etc.), implements of husbandry as defined in Ark. Code Ann. § 27-14-212 (farm tractors, combines, etc.), motorized bicycles, golf carts, riding lawn mowers, and all-terrain vehicles as defined in Ark. Code Ann. § 27-21-102.

006.05.06 Ark. Code R. 005-GR-34

Ark. Code Ann. §§ 26-52-401(6); 26-52-410; 26-52-415; 26-52-420; 26-52-510