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House panel approves bill shifting motorboat sales-tax collection to DFA
Summary
The Arkansas House Revenue & Taxation Committee passed SB 638, sponsored by State Representative Lee Johnson, to move collection of sales tax on motorboats sold by motorboat dealers to the Department of Finance and Administration at tag issuance; the measure passed by voice vote and no public testimony was recorded.
The Arkansas House Revenue & Taxation Committee voted to pass SB 638, sponsored by State Representative Lee Johnson of District 47, which would require sales tax on new and used motorboats bought from motorboat dealers to be collected by the Department of Finance and Administration (DFA) when buyers obtain tags rather than by dealers at the point of sale.
The change is intended to align motorboat tax collection with the current process for motor vehicles and to relieve dealers from serving as the tax collector, Johnson said. "This bill is trying to amend the way or or alter the way we collect sales tax on new and used motorboats bought from a motorboat dealer," Johnson said during committee discussion.
Committee members heard a brief discussion about the policy rationale and administrative effects. Representative Ray asked Johnson for the policy reason for the change; Johnson said it removes the dealer from collecting the tax and lets DFA collect the revenue directly when purchasers go for tags. Representative Blindstrom raised concerns about requiring consumers to visit the revenue office, calling the process "torturous" and saying locals refer to it as "hell's waiting room." Johnson responded that buyers already must obtain tags to put boats on the water and that the change would not add a separate step for buyers.
Representative McClure asked how many other states use the same procedure; Johnson said he did not have that information and offered to look into it. The transcript records a reference to "DFNA," which staff and members used during discussion; the committee and staff clarified the responsible agency as the Department of Finance and Administration (DFA) in the committee record.
There was no public testimony for or against the bill recorded in the transcript. Representative Johnson closed the bill for consideration, a motion to pass was made, and the committee approved SB 638 by voice vote; a roll-call tally was not recorded in the transcript.
The committee chair said the bill had passed and moved to adjourn; the committee noted this was the only bill on the agenda and that any future meeting would be at the call of the chair.
