This bill aims to exempt a manufacturer's rebate on a motor vehicle from sales and use tax by modifying the definitions of "gross receipts" and "sales price" under the Arkansas Gross Receipts Act of 1941 and the Arkansas Compensating Tax Act of 1949. Specifically, it adds a new provision stating that a manufacturer's rebate on a motor vehicle is not included in the definitions of "gross receipts," "gross proceeds," or "sales price." This change is intended to clarify that such rebates should not be subject to sales and use taxes, thereby potentially lowering the overall cost for consumers purchasing motor vehicles.

Additionally, the bill includes an effective date stipulation, indicating that the changes will take effect on the first day of the calendar quarter following the act's effective date. This ensures that the new tax exemption will be implemented in a timely manner, allowing both consumers and manufacturers to adjust to the updated tax regulations.

Statutes affected:
HB 1194: 26-52-103(19), 26-53-102(19)