Department of Finance and Administration
Legislative Impact Statement
Bill: HB1172
Bill Subtitle: TO CREATE A SALES AND USE TAX EXEMPTION FOR MORTALITY COMPOSTING
DEVICES SOLD TO A COMMERCIAL LIVESTOCK OR POULTRY PRODUCER.
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Basic Change :
Sponsors: Rep. Vaught and Sen. Dees
HB1172 creates a new section in the Arkansas Code, 26-52-455, to provide a sales and use tax
exemption for the sale of a "mortality composting device" to a commercial livestock or poultry producer.
A "mortality composting device" is an in-vessel mortality composter that incorporates a container or
vessel to hold the composting materials and compost the deceased livestock or poultry inside the
container or vessel. To qualify for the exemption, the mortality composting device must:
Be designed for the purposes of the biological decomposition and stabilization of organic
matter under controlled aerobic conditions;
Confine the composting material to a container or receptacle rather than a building or concrete
bunker; and
Be sold to a person engaged in the commercial production of livestock or poultry.
The sale of a mortality composting device will be exempt from gross receipts taxes levied under
26-52-301, -302, and 26-36-402, compensating use taxes levied under 26-53-106 and -107, and all
city and county sales and use taxes.
The exemption is effective on the first day of the calendar quarter following the effective date of the act.
An effective date of October 1, 2023 is assumed for purposes of the revenue impact below.
Revenue Impact :
FY2024
Total Approximate State Sales and Use Tax Loss $ - 542,667
(Estimated Effective Date 10/1/23 --- 8 months reduced tax collection)
$ - 364,046
General Revenue - 4.5%
Property Tax Relief - .5% $ - 40,450
Conservation Fund - .125% $ - 10,112
Educational Adequacy Fund - .875% $ - 70,787
Highway Fund - .5% $ - 40,450
Educational Excellence Trust Fund - $ - .000
Educational Adequacy (GR Transfer) - $ - .000
Total Approximate Local City and County Sales and Use Tax Loss $ - 180,889
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1/27/2023 5:39 PM 1
 Department of Finance and Administration
Legislative Impact Statement
Bill: HB1172
Bill Subtitle: TO CREATE A SALES AND USE TAX EXEMPTION FOR MORTALITY COMPOSTING
DEVICES SOLD TO A COMMERCIAL LIVESTOCK OR POULTRY PRODUCER.
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FY2025
Total Approximate State Sales and Use Tax Loss $ - 814,000
General Revenue - 4.5% $ - 490,042
Property Tax Relief - .5% $ - 60,674
Conservation Fund - .125% $ - 15,169
Educational Adequacy Fund - .875% $ - 106,180
Highway Fund - .5% $ - 60,674
Educational Excellence Trust Fund - $ - 51,476
Educational Adequacy (GR Transfer) - $ - 4,551
State Central Services $ - 17,094
Constitutional Officers - $ - 8,140
Total Approximate Local City and County Sales and Use Tax Loss $ - 271,333
Taxpayer Impact :
A commercial livestock or poultry producer purchasing mortality composting devices would no longer
be responsible for paying sales and use taxes on those purchases.
Resources Required :
None.
Time Required :
Adequate time is provided for implementation.
Procedural Changes :
Updates to the Sales and Use Tax Rules will need to be promulgated.
Other Comments :
None.
Legal Analysis :
The sale of a mortality composting device does not qualify for the existing exemption for farm
equipment and machinery because a mortality composting device is not an implement used exclusively
and directly in the commercial production of food or fiber.
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