Senate Revenue & Tax Committee advances firefighter fund, marketplace seller rules; several tax bills fail or are deferred

The Senate Revenue & Tax Committee met and took action on a range of tax and revenue measures, passing a pair of bills and defeating several others after sponsor presentations and DFA testimony.

The committee approved Senate Bill 5-85, a measure to create a charitable-style fund administered by the state insurance department to benefit firefighters battling cancer. Senator Disbane said the bill (as amended earlier) removes provisions that would have required new state credits and instead simply creates the mechanism for a fund to be built through contributions; the committee adopted the motion to pass by voice vote.

That was followed by passage of Senate Bill 6-28, which the sponsor described as a clarification for marketplace sellers of accommodation services. The measure aims to remove ambiguity about how online platforms remit sales taxes for short-term lodging and related services; after questions about prior fixes the committee approved the bill by voice vote.

On more contested measures, Senate Bill 3-89 — a proposal to exempt coins, currency and precious-metals bullion from sales tax — drew a dispute over revenues. Senator Johnson argued Arkansas is at a competitive disadvantage without the exemption and said businesses had moved out of state; DFA analyst Paul Gehring testified the department’s fiscal-impact estimate for an eight-month FY '20 period would be a $383,000 reduction in state revenue and $128,000 to cities and counties, and with a full year the state loss would be $575,000 and local loss $190,000. The committee ultimately failed to approve the exemption.

An amendment offered on Senate Bill 3-47 would have set a 40% tax on e-cigarette and vaping products, clarified it would not apply to existing retail inventory, and directed proceeds to general revenue. Sponsor Will Bond said earlier task-force estimates had been as high as $7.1 million but were later revised downward. The committee adopted the amendment but, after debate, failed to pass the amended bill.

Senate Bill 6-40, which concluded testimony earlier in the week, returned for the sponsor’s closing remarks. The sponsor gave a personal, emotional closing statement tying the measure to advocacy for children with special needs and urged committee support; the committee took a voice vote on the motion and the bill did not pass.

On housekeeping measures carried by the Department of Finance and Administration (DFA): House Bill 17-21 passed; DFA staff said the bill clarifies which service pay and allowances for active-duty military members are exempt from Arkansas income tax and that it carries no fiscal impact. House Bill 17-25, a cleanup removing obsolete statutory language (including references to an estate tax and an unused cigarette-receptacle credit), also passed. Two DFA bills that would change lien and offset timing (House Bills 17-22 and 17-23) drew extended technical questions about bankruptcy tolling, lien priority and title-company implications; the chair elected to pass those items over for further review.

Quotes from the meeting illustrate the range of issues. On the coins exemption, the sponsor said the state is "at a tremendous disadvantage for having coin shows" and cited a local dealer who moved out of state. Regarding the DFA fiscal estimate for the bullion exemption, Gehring stated: "For FY '20 ... we would have a revenue impact of $383,000 to state revenues," and for a full FY '21 "a revenue loss for state revenues of $575,000." On the vaping amendment, sponsor Will Bond said the revision would "lower the tax to 40%" and clarified it would not apply to existing inventory.

What happens next: measures that passed will be scheduled for further floor consideration; the chair said some items may be revisited at the call of the chair and the committee may meet again on Friday. Several bills were explicitly passed over for additional review rather than advanced.

Votes at a glance

- SB 6-27 (dental appliances sales-tax exemption): passed (voice vote). - SB 6-40 (sponsor closing; special-needs-related bill): failed (voice vote). - SB 3-89 (coins/precious-metals sales-tax exemption): failed after DFA fiscal testimony. - SB 3-47 (e-cigarette/vaping tax, amended to 40%): amendment adopted; bill failed. - SB 5-85 (firefighter cancer fund mechanism): passed (voice vote). - SB 6-28 (marketplace sellers — accommodations): passed (voice vote). - HB 17-21 (military pay exemption clarification): passed (voice vote). - HB 17-22 (tolling liens during bankruptcy): discussed, passed over for further review. - HB 17-23 (offset refunds at final assessment): discussed, skipped/passed over. - HB 17-25 (cleanup of obsolete code): passed (voice vote).

Sources: Committee presentations and DFA testimony on record at the hearing. The article attributes direct quotes only to named participants who spoke on the record in the transcript (Senator Hester; Senator Johnson; Senator Will Bond; Senator Disbane; Paul Gehring, Arkansas DFA).