Arkansas Democrat-Gazette

Tax-exemption rise for used cars OK’d

- — John Moritz

Legislatio­n to waive sales taxes on used cars sold for $10,000 or less easily passed in the House on Monday.

House Bill 1160, by Rep. John Payton, R-Wilburn, would increase the current exemption from $4,000 to $7,500 in the first two years. The exemption would then increase to $10,000 and continue thereafter.

Payton said the legislatio­n would primarily help low-income Arkansans who purchase cheap used cars to get to and from work.

“By the time this vehicle gets down to this price, it’s already been taxed four or five times,” Payton said.

If passed, the bill will cause state tax revenue to decrease by $24.4 million in fiscal 2024, when the $10,000 exemption is in full effect, according to an estimate by the Bureau of Legislativ­e Research. The bureau also estimated that the legislatio­n would cause a $3.5 million hit to city and county sales taxes in that tax year.

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