Summary of 2019 Arkansas Miscellaneous Tax Legislation

Arkansas has a number of miscellaneous taxes, some of which saw significant changes in 2019.  Highlights include a new wholesale fuel tax and increased E911 fees.  

Act 368 amends the age of a historic or special interest vehicle that qualifies for an exemption from registration fees and from twenty-five (25) to forty-five (45) years of age or older and requires yearly proof of current insurance coverage to maintain such exemption.

Act 416 is a highway funding package. It imposes new wholesale fuel taxes of effectively 3ȼ/gal. for gasoline and 6ȼ/gal. for diesel, with minor future potential upward adjustments for inflation. It also imposes new annual fees of $100 for hybrid vehicles and $200 for electric vehicles (to pay their fair share of highway costs). The effective date for these revenues raisers is likely October 1, 2019. In addition, Act 416 also provides for the diversions to the highway fund of at least $35 million of casino gaming or general revenue. 

Act 454 extends the expiration date of the stabilization tax under the Workforce Services Law through June 30, 2023. This tax funds worker training and unemployment insurance administration. 

Act 474 clarifies that state active military duty qualifies for existing benefits under certain provisions of retirement systems, employment protection provisions, and tax provisions.

Act 512 sets up a sliding-scale wage base for Arkansas unemployment insurance contributions, depending on the unemployment rate and the funding of the unemployment insurance trust fund. 

Act 521 is an insurance regulation omnibus bill. Among its changes, it shifts surplus lines brokers to reporting and paying tax on a quarterly basis instead of a monthly basis, as well as potentially requiring certain information reporting.

Act 560 allows imposition of advertising and promotion commission ("A&P") tax on the admission price to a state park located within the municipal boundary of the city or town.

Act 580 increases the taxes on e-cigarettes, cigarette paper, and medical marijuana sales, designating those new revenues and the general revenue portion of medical marijuana taxes to the University of Arkansas for Medical Services National Cancer Institute's Designation Trust Fund, and making other adjustments to Arkansas tobacco laws. Effective September 1, 2019.

Act 592 extends the medical marijuana special privilege tax to expire July 1, 2021 (instead of July 1, 2019).

Act 660, the Public Safety Act of 2019, increases telephone service charges to pay for improvements to 911 service. Funding is provided by renaming the emergency telephone service charge the public safety charge and increasing it from 65ȼ per month to $1.30 per month for commercial mobile radio services, VOIP services, and nontraditional telephone service. The prepaid wireless charge is similarly renamed and is changed from 65ȼ per transaction to 10% of the value of the purchased service. The new charges are effective October 1, 2019.

Act 698 regulates travel insurance and subjects travel insurance premiums to Arkansas premium tax. Effective for travel insurance sold on or after October 1, 2019.

Act 670 repeals certain unused portions of the tax code (cigarette receptacle tax credit and special interest rates for the repealed estate tax).

Act 682 defines retailers at which a person may cash winning lottery tickets if such winnings are less than the federal tax withholding threshold, otherwise winning tickets shall be claimed from the Office of the Arkansas Lottery. 

Act 703 authorizes cities and counties to pledge net gaming receipts tax revenues to repay capital improvement bonds or economic development project bonds. 

Act 705 extends until July 1, 2021, the diversion to general revenue of the first 4½ mils of the Oil and Gas Commission assessment on natural gas.

Act 803 adds the Office of Driver's Services to the list of claimant agencies authorized for state tax refund setoffs, and provides that, upon notice and certification, outstanding fees for reinstatement of a driver's license payable to the Office of Driver Services under Ark. Code Ann. § 5-65-119, Ark. Code Ann. § 27-16-508, and Ark. Code Ann. § 27-16-808 will bet setoff against the taxpayer's Arkansas state income tax refund. 

Act 861 amends the exemption from privilege tax for home-brewed beer to allow removal from the manufacturer's premises for personal or family use, organized affairs, exhibitions, competitions and tastings. 

Act 980 requires a tire retailer to account for each tire removed from a rim in the manner prescribed by the Department of Finance and Administration (currently, a tire retailer does such accounting by using the electronic uniform manifest system) and requires a person who imports a used tire to register with the Department and comply with all requirements related to collecting and reporting import fees (currently, a person who imports a used tire is required to comply with the electronic uniform used tire manifest system).

Act 1055 establishes the Empower Independent Contractors Act that generally adopts the IRS twenty-factor test for determining whether a person is an employee or independent contractor for various purposes, including unemployment insurance. 

Act 1071 is primarily a statutory clean-up bill that pertains to Arkansas Tobacco Control (ATC) and amends numerous sections of the Arkansas Code concerning the powers and duties of the Arkansas Tobacco Control Board (ATCB). In addition, this bill also adds ATC and ATCB to the list of claimant agencies that may setoff a debt owned to ATC or ATCB against a state income tax refund. 

Act 1077 amends the procedure for fire protection district annual assessments and requires the quorum court of the county to review and approve or disapprove any assessor's reassessment that exceeds one hundred dollars ($100). Effective April 17, 2019.

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