Ma­chin­ery-re­pair tax bill ad­vances

Northwest Arkansas Democrat-Gazette - - NATIONAL - — Michael R. Wickline

The Se­nate ad­vanced leg­is­la­tion on Mon­day that would phase out the In­vestArk tax- credit pro­gram in ex­change for pro­vid­ing a sales-tax ex­emp­tion for man­u­fac­tur­ers on pur­chases re­lated to re­pair­ing ma­chin­ery and equip­ment.

The Se­nate voted 33-1 for Se­nate Bill 362 by Sen. Lance Eads, R-Spring­dale. The bill would sun­set the In­vestArk pro­gram on July 1 with no new ap­pli­cants for the tax cred­its be­ing ac­cepted, the Fi­nance and Ad­min­is­tra­tion Depart­ment said.

Un­der cur­rent state law, man­u­fac­tur­ers’ pur­chases of re­pair, re­place­ment and mod­i­fi­ca­tion parts and ser­vices for ex­ist­ing ma­chin­ery and equip­ment are eli­gi­ble for a tax re­fund of 1 per­cent­age point of Arkansas’ 6.5 per­cent sales and use tax. The bill would re­duce the net tax rate to 4.5 per­cent, ef­fec­tive July 1, 2018; then 1 per­cent­age point a year un­til it reaches 1.5 per­cent in 2021. The rate would then drop to zero, ef­fec­tive July 1, 2022, ac­cord­ing to the fi­nance depart­ment.

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