All Roll Calls
Yes: 93 • No: 23
ArkansasSB6382025 Regular SessionSenateWALLET
TO AMEND THE LAW CONCERNING THE COLLECTION OF SALES AND USE TAX ON THE SALE OF A NEW OR USED MOTORBOAT; AND TO PROVIDE FOR THE DIRECT PAYMENT OF SALES AND USE TAX ON A MOTORBOAT SOLD BY A MOTORBOAT DEALER.
Sponsored By: Justin Boyd (Republican), Lee Johnson (Republican)
Enacted
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Bill Overview
Analyzed Economic Effects
6 provisions identified: 2 benefits, 3 costs, 1 mixed.
Boat trade-ins lower buyers’ taxable price
When you trade in a used motorboat, its trade-in credit reduces the amount taxed on your dealer purchase. Tax applies to the purchase amount minus that credit. This covers new and used boats bought from Arkansas dealers or out-of-state dealers. The rule begins on the first day of the calendar quarter after the act’s effective date.
Boat dealers get resale parts tax relief
Motorboat dealers pay no Arkansas gross receipts tax on parts and accessories bought for resale. The exemption also covers parts used to recondition or rebuild used motorboats intended for resale. Dealers must meet the dealer-resale requirements in § 26-52-401(12)(A) and applicable rules. The exemption begins on the first day of the calendar quarter after the act’s effective date.
Boat buyers face stricter tax calculations
A used motorboat’s taxable value is presumed to be the higher of its documented price or published average loan value. That loan value comes from a current, industry-accepted publication. If it is higher, buyers must prove their stated price to Arkansas’s finance secretary; a rejected price means the published value applies. Buyers also receive no Arkansas credit for other-state sales or use tax if the boat was first registered or titled in Arkansas. These rules begin on the first day of the calendar quarter after the act’s effective date.
Boat buyers pay tax at registration
For dealer-bought motorboats that require Arkansas registration, buyers pay state tax directly to the Department of Finance and Administration. Arkansas dealer purchases carry sales tax; out-of-state dealer purchases carry use tax, and dealers cannot collect these taxes. Payment is due on or before applying for a certificate of number, the boat’s registration. Late payment adds a 10% penalty; all tax and penalties must be paid before registration is issued. These rules begin on the first day of the calendar quarter after the act’s effective date.
Dealers owe tax on service boats
Dealers taking new inventory boats for service use must obtain registration and title and pay tax on the listed retail price. Service boats are driven only by dealership employees to transport customers, parts, or equipment—not for rentals, demonstrations, or personal use. When a used service boat returns to inventory, its new replacement is taxed on the listed retail price minus the used boat’s value. The used value is the highest listed wholesale price in a current, industry-accepted publication. These rules begin on the first day of the calendar quarter after the act’s effective date.
Dealer boat titles skip upfront tax
Dealers with a permit under § 27-101-302(5) can obtain a used boat’s title without upfront sales or use tax. They must pay applicable fees and apply for a certificate of number solely to obtain title. A sale by the original franchise dealer to anyone other than a same-make franchise dealer remains taxable when registration is requested. These boats cannot operate on Arkansas waters without displaying the identifying certificate of number issued through this permit process. These rules begin on the first day of the calendar quarter after the act’s effective date.
Sponsors & Cosponsors
Sponsors
Justin Boyd
Republican • Senate
Lee Johnson
Republican • House
Cosponsors
Dolly Henley
Republican • House
Roll Call Votes
House vote • 4/16/2025
House Vote - Wednesday, April 16, 2025 10:52:26 AM
Yes: 58 • No: 23 • Other: 10
Senate vote • 4/10/2025
Senate Vote - Thursday, April 10, 2025 3:31:37 PM
Yes: 35 • No: 0
Actions Timeline
Notification that SB638 is now Act 1019
4/23/2025SenateDELIVERED TO GOVERNOR.
4/16/2025SenateReported correctly enrolled and ordered delivered to the Governor.
4/16/2025SenateORDERED ENROLLED
4/16/2025SenateReturned from the House as passed.
4/16/2025SenateReturned to the Senate as passed.
4/16/2025HouseRead the third time and passed and ordered transmitted to the Senate.
4/16/2025HouseReturned by the Committee Do Pass
4/14/2025HouseRead the first time, rules suspended, read the second time and referred to the Committee on REVENUE & TAXATION- HOUSE
4/10/2025HouseRECEIVED FROM THE SENATE
4/10/2025HouseOrdered immediately transmitted to the House.
4/10/2025SenateRead the third time and passed.
4/10/2025SenateRules suspended.
4/10/2025SenateReturned by the Committee, with the recommendation that it Do Pass
4/10/2025SenateRead first time, rules suspended, read second time, referred to REVENUE & TAX - SENATE
4/9/2025SenateFiled
4/9/2025Senate
Bill Text
SB638 - Introduced
4/9/2025
Act Version
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