Committee advances bill creating farm sales-tax ID card despite staff concerns about costs

The House Revenue & Taxation Committee voted to advance a bill that would allow the Department of Finance and Administration to issue farm sales-tax identification cards to qualifying farmers to simplify claiming sales-tax exemptions.

Mark Lambert of the Arkansas Farm Bureau and other farm representatives told the committee the card would reduce paperwork for farmers and retailers and keep sales tax dollars in Arkansas by discouraging cross-border purchases. Paul Gearing of DFA explained that current practice requires retailers to retain an exemption claim form per transaction and that DFA audits exemption claims periodically; purchases of certain all-terrain vehicles are already required to be reported directly to DFA because of past abuses.

DFA officials, including Paul Gearing and Secretary Hudson, said implementing a central card program would require up-front resources to verify applicants and prevent abuse. DFA told the committee it estimated one-time project costs of about $340,000, ongoing annual maintenance and support expenses (figures discussed included $28,000 and other operating-support estimates), and a recommended initial staff structure that included four new analyst positions plus a supervisor. Committee members pressed DFA on whether existing paper processes already provided verification and on the expected workload; DFA said initial staffing needs would be higher for implementation and said ongoing maintenance would be lower.

After extended questioning, Representative Wooten moved “do pass,” and the committee advanced the bill by voice vote. The bill keeps the existing transaction-level exemption certificate in place as an alternative for farmers who opt not to apply for a card; DFA said forms will continue to be processed and audited under current practice.