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Committee advances HB 10-10 to expand 'flyaway' exemption for certain aircraft sales
Summary
HB 10-10 would remove a maximum takeoff weight threshold from the state 'flyaway' sales-tax exemption so Arkansas sellers need not collect sales tax when an aircraft will be based out of state; sponsors said there is no expected revenue impact.
Senator Mark Johnson (District 15) presented House Bill 10-10 as a cleanup measure to expand the existing 'flyaway' exemption for certain aircraft sales by removing the maximum takeoff-weight requirement. The sponsor said the exemption originally covered sales between out-of-state purchasers and sellers and was expanded in 2017 to include aircraft based outside Arkansas with a maximum takeoff weight over 9,500 pounds. HB 10-10 would remove the weight cap so Arkansas sellers would not be required to collect sales and use tax when a buyer takes possession in Arkansas and the aircraft will be based in another state.
Committee members asked whether sales that remain in-state would still be taxable; the sponsor and DFA staff explained the exemption applies when the transaction is effectively interstate and that other states' laws could determine taxability for their residents. The sponsor said the bill has no revenue impact because the tax burden would fall to the state where the aircraft is ultimately based.
The committee adopted an amendment adding the presenting senator as a cosponsor and passed HB 10-10 as amended by voice vote.
