Panel approves modest, one-time state tax credit for new electric and hybrid vehicles

The Senate Revenue & Tax Committee passed Senate Bill 482, which creates a one-time state income tax credit for the purchase of qualifying new vehicles — $300 for a new electric vehicle and $150 for a new hybrid, limited to two credits per taxpayer per year and available only to taxpayers with state income tax liability.

Sponsor Senator Bond said the credit is intended to encourage purchase of more fuel‑efficient vehicles without undermining prior infrastructure legislation. He described the credits as modest and designed to be initial incentives that could be expanded later.

Arkansas Department of Finance and Administration staff revised the department’s fiscal projection after the committee amendment and estimated a fiscal impact of approximately $336,000 in FY 2020. DFA said that estimate assumed roughly 120 new electric vehicles and 2,000 new hybrids purchased per year in the state, and that federal tax credits and manufacturer‑specific phaseouts affect take‑up.

Supporters including Glenn Hooks, director of the Arkansas Sierra Club, and Sharmel Roussell of Arkansas Interfaith Power and Light testified in favor, saying the credit promotes cleaner transportation and helps offset recent registration fees enacted on hybrid and electric vehicles. Barry Hawes, a citizen and long‑time hybrid owner, described the provision as a fairness measure for Arkansans who choose more fuel‑efficient vehicles.

The committee approved the measure on a voice vote and it will advance in the legislative process.