Department of Finance and Administration
Legislative Impact Statement
Bill: HB1346
Bill Subtitle: TO CREATE A SALES AND USE TAX EXEMPTION FOR THE PURCHASE OF A
BUSINESS VEHICLE BY A FOOD PANTRY; AND TO CREATE A ONE-TIME REBATE OF STATE
SALES AND USE TAX FOR THE PURCHASE OF A BUSINESS VEHICLE IN 2022 BY A FOOD
PANTRY.
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Basic Change :
Sponsors: Rep. Tosh and Sen. D. Wallace
HB1346 creates a sales and use tax exemption for the purchase of a business vehicle by a food
pantry. HB1346 defines a "business vehicle" as a motor vehicle that is purchased by a food pantry to
deliver food to recipients of the food pantry's service and is not used for the personal commuting of a
staff member or executive of the food pantry. HB1346 defines a "food pantry" as a nonprofit
corporation whose mission is to distribute food to people who have difficulty purchasing enough food to
avoid hunger.
HB1346 contains temporary language to allow a food pantry that purchased a business vehicle in 2022
to apply for a rebate of the sales or use tax paid.
The exemption is effective on the first day of the second calendar month following the effective date of
the act. For purposes of the Revenue Impact below, an effective date of September 1, 2023 is
assumed.
Revenue Impact :
FY2024
Total Approximate State Sales and Use Tax Loss $ - 17,500
(Estimated Effective Date 09/1/23 – Includes rebates retroactively dating back to CY22)
General Revenue - 4.5% $ - 11,740
Property Tax Relief - .5% $ - 1,304
Conservation Fund - .125% $ - 326
Educational Adequacy Fund - .875% $ - 2,283
Highway Fund - .5% $ - 1,346
Educational Excellence Trust Fund - $ - 0.00
Educational Adequacy (GR Transfer) - $ - 0.00
State Central Services - $ - 339
Constitutional Officers - $ - 162
Total Approximate Local City and County Sales and Use Tax Loss $ - 675
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 Department of Finance and Administration
Legislative Impact Statement
Bill: HB1346
Bill Subtitle: TO CREATE A SALES AND USE TAX EXEMPTION FOR THE PURCHASE OF A
BUSINESS VEHICLE BY A FOOD PANTRY; AND TO CREATE A ONE-TIME REBATE OF STATE
SALES AND USE TAX FOR THE PURCHASE OF A BUSINESS VEHICLE IN 2022 BY A FOOD
PANTRY.
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FY2025
Total Approximate State Sales and Use Tax Loss $ - 16,000
General Revenue - 4.5% $ - 9,357
Property Tax Relief - .5% $ - 1,193
Conservation Fund - .125% $ - 298
Educational Adequacy Fund - .875% $ - 2,087
Highway Fund - .5% $ - 1,231
Educational Excellence Trust Fund - $ - 1,265
Educational Adequacy (GR Transfer) - $ - 112
State Central Services - $ - 310
Constitutional Officers - $ - 148
Total Approximate Local City and County Sales and Use Tax Loss $ - 600
Taxpayer Impact :
An entity that meets the definition of a food pantry in accordance with this bill would no longer be
responsible for paying sales tax on the purchase of a motor vehicle used for the delivery of food to
recipients in conjunction with the food pantry service. Any food pantry that has purchased a motor
vehicle for this purpose during the 2022 calendar year would be able to claim a rebate of the taxes
previously paid on those purchases.
Resources Required :
The Arkansas Integrated Revenue System (AIRS) system will need to be programmed to
accommodate this change. Requirements gathering, development, testing, and training will take
approximately 180 hours at a cost of $36,000. Recurring maintenance at a cost of $2,000 annually
would also be required.
Time Required :
Adequate time is provided for implementation.
Procedural Changes :
Updates to the Sales and Use Tax rules will be promulgated as well as modifications to the tax
database for motor vehicles will be required. Updates will be required to the Office of Motor Vehicle
Manual and DFA website. Training for State Revenue Office clerks and Office Motor Vehicle staff will
be required. The taxpayer community will also need to be educated. A new rebate request form must
be created for the retroactive refund requests.
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 Department of Finance and Administration
Legislative Impact Statement
Bill: HB1346
Bill Subtitle: TO CREATE A SALES AND USE TAX EXEMPTION FOR THE PURCHASE OF A
BUSINESS VEHICLE BY A FOOD PANTRY; AND TO CREATE A ONE-TIME REBATE OF STATE
SALES AND USE TAX FOR THE PURCHASE OF A BUSINESS VEHICLE IN 2022 BY A FOOD
PANTRY.
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Other Comments :
None.
Legal Analysis :
HB1346 contains temporary language that allows a food pantry that purchased a business vehicle in
2022 to obtain a rebate of the sales or use tax paid. HB1346 may benefit from an amendment to allow
a rebate for a food pantry that purchased a business vehicle from January 1, 2023 to the effective date
of the act because the bill would appear to exclude from the rebate a vehicle purchased during this
period.
HB1346 may benefit from an amendment to allow the Department of Finance and Administration (DFA)
to promulgate rules if necessary, rather than to require the promulgation of a potentially unnecessary
rule.
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