SALT Report 2374 –The Arkansas Legislature amended the sales and use tax law that applies to long-term vehicle rentals. Senate Bill 688 provides that sales tax is imposed on a lease or rental of a motor vehicle that occurs for 30 days or more. The tax applies to all rental or lease payments made to the lessor during the term of the lease or rental.
Additionally, the bill provides that if the state’s Chief Fiscal Officer certifies that 3%, or more, of all new motor vehicles registered in the state during a calendar year are leased vehicles, then the 1.5% long-term rental vehicle tax that is imposed in addition to the sales and use tax will expire on June 30th of the fiscal year following the year the certification is made. The 3% rate has been reduced from 10% or more of all vehicles registered in the state.
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