Arkansas bill proposed to change used car sales tax threshold

Local News

Cabot, Ark – Arkansas is looking to increase the threshold at which sales tax is collected on used cars.  Currently there are no sales taxes collected on vehicles at $4,000 or less. 

HB1160 is looking to increase the threshold to $7,500 and then in two years increase it again to $10,000.

Mitch Ward, who owns Red River Auto Group, says there isn’t much on the market at the $4,000 price, “You can’t buy a side-by-side for 4,000, you can’t buy a 4-wheeler for $4,000, but they’re saying ‘hey go buy a reliable transportation to get you back and forth to work and don’t pay sales tax’…it’s not happening.”

He’s been in the car business for a long time and he sees people doing everything they can to scrape enough money to buy a car, “I’ve watched it every single day.  People are doing everything they can to stay in reliable transportation and the state of Arkansas just takes the sales tax, you know.”

Ward says most vehicles at that price point have been taxed multiple times when being registered.  He says many times that first payment and the sales tax are due at about the same time, “Forking up another $600-$800 at the revenue office is a huge deal.”

Ward supports HB1160 and thinks it will help many Arkansans who need reliable transportation in the state, “So if we can help out the people buying the less expensive car, why not? Let’s go for it.”

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